Refer to Figure 3-2. An increase in the price of substitutes in production would be represented by a movement from
A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
D
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If the market value of a firm is $6 billion and Tobin's q is equal to 2, then the replacement cost of installed capital must be ________
A) $2 billion B) $3 billion C) $9 billion D) $18 billion
Which of the following is NOT correct about a single-price monopoly?
A) Maximum profit is found where demand is the most inelastic. B) Marginal revenue is negative when demand is inelastic. C) Marginal revenue is positive when demand is elastic. D) To sell more output, the firm must lower its price. E) To maximize its profit, the firm produces so that marginal revenue equals marginal cost.
A deadweight loss:
A. can be large in a perfectly competitive market. B. is a reduction in aggregate surplus below its maximum possible value. C. is independent the amount produced and consumed. D. is equal to the difference between total willingness to pay and the total avoidable cost of production.
High sunk costs in the jet aircraft market has assured Boeing of a monopoly in the production of jets for the air travel market.
Answer the following statement true (T) or false (F)