Suppose a monopoly sells to two identifiably different types of customers, A and B, who are unable to practice arbitrage. The inverse demand curve for group A is PA = 10 - QA, and the inverse demand curve for group B is PB = 18 - QB. The monopolist is able to produce the good for either type of customer at a constant marginal cost of 2, and the monopolist has no fixed costs. If the monopolist
practices group price discrimination, the profit-maximizing prices charged to each type of customer are
A) PA = 6, and PB = 10.
B) PA = 4 and PB = 8.
C) PA = 10, and PB = 6.
D) PA = 8, and PB = 4.
A
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Assume both the demand for bagels and the supply of bagels increase. Which of the following outcomes is certain to occur?
A. The equilibrium quantity of bagels will rise. B. The equilibrium quantity of bagels will fall. C. The equilibrium price of bagels will rise. D. The equilibrium price of bagels will fall.
If the U.S. capital and financial account balance has a $30 million surplus and there was no change in official reserves during that year, we know that
A) the United States has a $30 million current account deficit. B) U.S. official reserves have increased by $30 million. C) the United States is a net lender. D) U.S. net foreign lending must equal $30 million. E) the United States has a $30 million current account surplus.
Along the short-run Phillips curve SRPC0 the natural unemployment rate is
A) 7 percent. B) 3 percent. C) 6 percent. D) an amount that can be determined from the figure, but none of the above answers is correct. E) an amount that cannot be determined from the figure. The figure above shows some Phillips curves for an economy.
Along an LM curve at lower interest rates there is __________ money demanded, so income must be lower to __________ the demand for transactions balances if the total demand for money is to equal the fixed supply
A) less; decrease B) less; increase C) more; decrease D) more; increase