The following table depicts the cost and demand structure a natural monopoly faces. Provided that the firm operates as a monopolist, what is the price charged and quantity produced in order to maximize profits?
A) price charged of $900 and quantity produced of 1
B) price charged of $800 and quantity produced of 2
C) price charged of $700 and quantity produced of 3
D) price charged of $600 and quantity produced of 4
C
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
The main difference between perfect competition and monopolistic competition is
A) the number of sellers in the market. B) the ease of exit from the market. C) the difference in the firm's profits in the long run. D) the degree of product differentiation.
The short-run supply curve of the perfectly competitive industry is found by summing the
A. AC curves of the individual firms in the industry. B. AVC curves of the individual firms in the industry. C. MC curves above AVC of the individual firms in the industry. D. There is no short-run supply curve in a competitive industry.
We call costs that fall directly on an economic decision maker:
A. social costs. B. private costs. C. external costs. D. network costs.