Three hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the formula TC = 1,000Qmill + (Qmill)2, where Qmill indicates the mills annual production in thousands of tons. The marginal external cost of a mill's production (in dollars) is given by the formula MEC = 200 + 2Qmill. Finally, annual market demand (in thousands of tons) is given by the formula Qd = 200,000 - 100P. What is the competitive market quantity?
A. 108,000
B. 60,000
C. 500
D. 0
B. 60,000
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The investment function would shift inward to the left if
A) real disposable income decreased. B) there was an increase in business taxes. C) interest rates increased. D) there was a positive change in productive technology.
For many years the U.S. government imposed quotas on cheap, Middle Eastern oil imports. The U.S. consumer consequently paid $3 billion more per year for oil products. A likely rationale for such a policy is
A. people in the oil industry deserved the transfer. B. conservation. C. one cannot be dependent on foreign supplies of so crucial a resource. D. American oil was of higher quality and deserved a higher price.
Assume that autonomous consumption equals $200 and disposable income equals $1000. If total consumption equal $800, then the mpc equals
A) 0.2. B) 0.6. C) 0.8. D) 1.0.
Which of the following describes monopolistic competition?
A) homogeneous products B) P = MR = MC C) Advertising plays a key role. D) There is only one seller in the industry.