Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. Suppose Kate enters the market first and chooses her output before Alice. What is the difference in Kate's profit when she enters the market first compared to when Kate and Alice choose their outputs simultaneously?
A. When Kate enters the market first, her profit is $13,333.33 higher.
B. When Kate enters the market first, her profit is $5,000 higher.
C. When Kate enters the market first, her profit is $1,111.11 higher.
D. When Kate enters the market first, her profit is $3,888.89 lower.
C. When Kate enters the market first, her profit is $1,111.11 higher.
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A) potential GDP decreases. B) potential GDP increases. C) full employment decreases. D) the impact on potential GDP is uncertain
The excess burden of a tax
A) is measured by the administrative costs required to implement a tax system. B) is a measure of the foregone consumption as a result of having to pay taxes. C) is a measure of the hardship imposed on low-income individuals in a society. D) measures the efficiency loss to the economy that results from a tax, causing a reduction in the quantity of goods and services produced.
Why are there significant time lags in monetary policy?
a. Financial markets are inefficient and information takes several months to impact them. b. Changes in monetary policy only affect future projects such as factories, not current ones. c. Interest rates takes several months to change after a change in money supply. d. Interest rates are fixed and it takes several months to change laws to have the targets amended. e. Because of the Fed's relative inability to convince Congress about the necessity of a particular monetary policy.
Marginal cost is
A) the total cost of producing one unit of a good or service. B) the average cost of producing a good or service. C) the difference between the lowest price a firm would have been willing to accept and the price it actually receives. D) the additional cost to a firm of producing one more unit of a good or service.