Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist. QuantityPrice1$102$93$84$75$66$57$48$3If the marginal cost of producing each unit of output is $5, then the socially optimal level of output is ________.
A. 4 units
B. 7 units
C. 3 units
D. 6 units
Answer: D
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In 2009, global investors began to regain confidence in the financial system and reversed the flight to safety that had taken place during the depths of the financial crisis
Make use of a graph of the market for corporate bonds to show the impact on corporate bonds prices and yields.
Suppose the government expenditure increases by $200 and the simple spending multiplier equals 5 . The final increase in output will be: a. $6000
b. $500. c. $200. d. more than $200. e. less than $200.
Keynesian analysis suggests that a planned budget surplus
a. will affect aggregate demand only if the money supply decreases by the size of the surplus. b. will stimulate both consumption and income. c. will stimulate output and employment. d. is proper during periods of inflation but may increase unemployment if timed improperly.
In the chain of cause and effect involving monetary policy:
a. An increase in the money supply will decrease the rate of interest b. An increase in interest rates will increase the money supply c. A decrease in the rate of interest will decrease aggregate demand d. A decrease in aggregate demand will increase output and employment