Earnings of a resource is termed as economic rent if:
a. it has a perfectly elastic demand.
b. it has a perfectly elastic supply.
c. it has a perfectly inelastic supply.
d. it has a perfectly inelastic demand.
e. it has no demand.
c
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According to the Coase theorem, part of what is needed for private transactions to be efficient is that property rights
A) must be defined, but it does not matter who owns the property. B) must be defined, and it is crucial as to who owns the property. C) need not be defined as long as there are no transactions costs present. D) need to be defined by the government to avoid producers from exploiting high transactions costs.
As the price elasticity of demand for an item increases, so does the firm's ability to mark up the price of the item above average cost
Indicate whether the statement is true or false
The figure above shows the demand and cost curves facing a price-setting firm. In profit-maximizing (or loss-minimizing) equilibrium, the Lerner index is ________, and the elasticity of demand is ________.
A. 0.5; -2.0 B. 0.667; -1.5 C. 0.6; -1.667 D. 1.33; -0.75 E. 1 ; -1
Refer to the data. The profit-maximizing output for this firm:
A. is 3.
B. is 4.
C. is 5.
D. cannot be determined from the information given.