Suppose a monopolist has marginal cost of zero but recurring fixed costs. Then the monopolist will produce the efficient level of output so long as he can first degree price discriminate.
Answer the following statement true (T) or false (F)
True
Rationale: It is efficient to produce so long as consumer surplus when price is set to zero is greater than recurring fixed costs. Since the monopolist can capture all consumer surplus under first degree price discrimination, the monopolist will therefore produce whenever it is efficient to produce.
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For certain public projects such as building a dam on a river or a bridge to an island, what procedure is a government likely to use to determine what quantity of a public good should be supplied?
A) It hires economists to estimate the market demand for the product. B) It evaluates the costs and benefits of producing the good. C) It takes a vote in Congress. D) It conducts public surveys to determine if consumers want the product.
As of October 2012, which of the following was true?
A) deposits of foreign governments and international organizations > bank reserves > currency in circulation B) currency in circulation > bank reserves > deposits of foreign governments and international organizations C) bank reserves > currency in circulation > deposits of foreign government and international organizations D) currency in circulation > deposits of foreign governments and international organizations > bank reserves
One of the challenges for development economists working in health care is to figure out a way to:
A. give doctors the right incentives to practice good medicine. B. force families to make better health care choices. C. influence markets in order to keep the costs of healthcare lower. D. alter the educational system in order to mandate that a certain number of students go into healthcare fields.
Generally speaking, when aggregate output does ________, investment does ________.
A. well; poorly B. poorly; poorly C. poorly; well D. not change; well