Use the following figure showing the domestic demand and supply curves for product B in a hypothetical economy to answer the next question,
After trade, at a world price of Pw, the net gain of consumer surplus equals area(s)
A. B + C.
B. D.
C. B + C + E + F.
D. E + F.
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Antitrust enforcement of vertical relationships is generally focused on
a. The dominant firm using vertical contracts to extend market power to other levels of the supply chain b. Vertical contracts that reduce the intensity of competition c. Vertical contracts that harm consumers d. All of the above
The usual shape for a labor supply curve is
a. horizontal b. vertical c. dependent on the particular industry d. downward sloping e. upward sloping
Consider a market with (inverse) demand p = 100 - 2Q. There are two firms in the market with constant marginal and average costs of $10
a. Determine the Cournot equilibrium quantities and price b. What would be the collusive (joint-profit maximizing) price and quantity? c. Derive the deadweight loss from (i) Cournot Dupoly, (ii) Collusion, and (iii) Perfect competition in this market with the two firms.