Double markup problems arise when
a. upstream firms have no market power
b. downstream firms have no market power
c. upstream and downstream products are unrelated in demand
d. upstream and downstream firm's pricing decisions tend to decrease the demand for the other product
d
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Refer to the figure above. If a per-unit tax of $1.50 is imposed on the sale of Good X, what is the size of the deadweight loss due to taxation?
A) $5 million B) $7.5 million C) $1.5 million D) $2 million
The negative relation between investment spending and the interest rate is what gives the ________ curve its ________ slope
A) IS; upward B) IS; downward C) LM; downward D) LM; upward
Assume a new technology further reduces the cost of producing calculators. Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments. As a result, we can expect
a. a decrease in price but no predictable change in output. b. a decrease in output but no predictable change in price. c. an increase in output but no predictable change in price. d. a predictable decrease in both output and price.
Refer to the graph shown. Suppose the industry is currently perfectly competitive but then is taken over by a monopolist. Assuming that the monopolist maximizes profit:
A. the price of computers will decrease from $600 to $400 and the quantity demanded will rise from 200 to 400. B. the price of computers will increase from $400 to $600 and the quantity demanded will fall from 400 to 200. C. the price of computers will increase from $400 to $600 but there will be no change in quantity demanded. D. there will be no effect on the price of computers.