Given the scenario described, if the market price of hammers was $10, then:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13.
A. only House Depot would gain surplus by supplying hammers to the market.
B. only House Depot and Lace Hardware would gain surplus by supplying hammers to the market.
C. House Depot, Lace Hardware, and Bob's Hardware would all supply hammers to the market, but Bob's would lose surplus.
D. only House Depot and Bob's Hardware would supply hammers to the market.
A. only House Depot would gain surplus by supplying hammers to the market.
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If the demand curve facing the monopolist is P = 70 - 14Q, then the slope of its marginal revenue curve is:
A. -14. B. -28. C. -7. D. - 35.
A tax on polluting firms
A. would shift the LRAC curve upward. B. would shift the LRAC curve downward. C. would have the same impact on the firm as a subsidy. D. tends to have the perverse effect of increasing pollution.
If the marginal propensity to save is 0.4, then a $2 million increase in disposable income will
A) increase consumption by $5 million. B) decrease consumption by $1.2 million. C) increase consumption by $1.2 million. D) decrease consumption by $5 million.
The producer surplus to a monopolist must be
A) less than zero or the firm is in violation of anti-trust statutes. B) at least as great as the producer surplus in a competitive market. C) positive, otherwise why would the monopoly produce? D) the same as for a competitive market.