Answer the following questions true (T) or false (F)
1. A monopolist currently sells 18 units of a good. If marginal revenue on the last unit sold is $117, then the price of the good must be less than $117.
2. If a per-unit tax on output sold is imposed on a monopoly's product, the monopolist will increase its market price by the full amount of the tax.
3. Suppose a monopoly is producing its profit-maximizing output level. Now suppose the government imposes a lump-sum tax on the monopoly, independent of its output. As a result the monopoly's profit will fall.
1. FALSE
2. FALSE
3. TRUE
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The consumption function has two components: (1) consumption that depends on the level of income and (2)
a. permanent consumption b. transitory consumption c. autonomous consumption d. automatic consumption e. expected consumption
Explain how the GDP and the interest rate are related to the transactions demand and asset demand for money.
What will be an ideal response?
An increase in nominal GDP could result from an increase in
i. production. ii. prices. iii. subsidies. A) ii only B) i and ii C) i, ii, and iii D) i only E) i and iii
Which of the following is the BEST example of a common resource?
A) a can of Mountain Dew B) fish in the ocean C) cable television D) national defense