Three firms agree to operate as a monopoly and charge the monopoly price of $80 for their product and (jointly) produce the monopoly quantity of 5,000 units. If the competitive price for the product is $40, under the Clayton Act these three firms face treble damages of ________.
A) $3,000,000 B) $1,000,000 C) $200,000 D) $600,000
D) $600,000
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Which of the following will NOT shift an economy's production possibilities curve outward?
A. an increase in technology B. an improvement in the literacy rate C. a reduction in the unemployment rate D. an increase in the number of workers available
In the multiple-polluter case for a pollution permit system, suppose two firms, X and Y, face marginal abatement costs of MACX = 1.2AX and MACY = 0.4AY, respectively. To meet water quality standards, the government issues each firm pollution permits such that each firm must abate 20 units of pollution. If permit trading were allowed,
a. firm X would have an incentive to buy a permit as long as the price were less than $24 b. firm Y would be willing to sell a permit as long as the price were less than $8 c. at a permit price of $22, firm X would have an incentive to buy, but firm Y would have no incentive to sell d. no trading would take place because neither firm has an incentive to trade based on this model
The Athenian Theatre sells tickets for the same play at different prices: a lower price to those who opt for the seats at the back of the theatre and a higher price for those who purchase seats in the front, around the stage
Which of the following statements is true? A) This is an example of product differentiation but not price discrimination. B) Since the cost of producing the play does not change with the seating configuration, this is evidence of price discrimination based on market segmentation. C) Charging two different prices is an effective way to avoid an excess demand for play tickets; the higher price lowers quantity demanded to some extent. D) The theatre practices first-degree price discrimination by setting prices based on willingness to pay.
International capital markets experience a kind of risk not faced in domestic capital markets, namely
A) "economic meltdown" risk. B) Flood and hurricane crisis risk. C) the risk of unexpected downgrading of assets by Standard and Poor. D) the risk of exchange rate fluctuations. E) the risk of political upheaval.