Refer to Figure 10.2. In moving from the competitive level of output and price to the monopoly level of output and price, the monopolist is able to add to producer surplus:
A) the area BCEF.
B) the area BCEF less the area GFH.
C) the area BCEH.
D) the area BCEH less the area GFH.
E) none of the above
B
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Refer to the scenario above. What is the net present value of buying the warranty?
A) $3.75 B) -$10.18 C) $15.54 D) -$30
Corrina just graduated from college, is unemployed, and looking for her first real job. This is an example of
A) frictional unemployment. B) structural unemployment. C) seasonal unemployment. D) cyclical unemployment.
A bank will charge a higher interest rate the:
A. longer is the length of the loan, and the higher the risk of repayment. B. longer is the length of the loan, and the lower the risk of repayment. C. shorter is the length of the loan, and the higher the risk of repayment. D. shorter is the length of the loan, and the lower the risk of repayment.
Consider two restaurants located next door to each other: Quick Burger and The Sunshine Café. If Quick Burger opens a drive-through window, the increased traffic and noise will bother customers seated outside at The Sunshine Café. The table below shows the monthly payoffs to Quick Burger and The Sunshine Café when Quick Burger does and does not operate a drive-through window. Quick Burger Operates aDrive-Through WindowQuick Burger Does NotOperate Drive-Through WindowQuick Burger$24,000$15,000The Sunshine Café$11,000$23,000Suppose Quick Burger has the legal right to operate a drive-through window, and Quick Burger and the Sunshine Café can negotiate with each other at no cost. Which of the following arrangements would lead to the socially optimal outcome?
A. The Sunshine Café pays Quick Burger $10,500 per month not to operate the drive-through window. B. Quick Burger pays The Sunshine Café $10,500 per month to operate the drive-through window. C. The Sunshine Café pays Quick Burger $12,500 per month not to operate the drive-through window. D. Quick Burger pays The Sunshine Café $12,500 per month to operate the drive-through window.