Firm A is a monopoly. The demand for its output is p = 90 - Q. Production is such that Q = L. Firm A hires only unionized labor. The marginal cost to the union is $10 per unit of labor. The union will sell
A) 20 units of labor at a wage of $10.
B) 20 units of labor at a wage of $40.
C) 20 units of labor at a wage of $50.
D) 20 units of labor at a wage of $70.
C
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A monopolist changes price from $1 to $2 and sells 10 fewer units. The marginal revenue is
A) $10 B) -$10 C) $0 D) impossible to determine with the information provided.
Which of the following models results in the greatest deadweight loss assuming a fixed number of firms with identical costs and a given demand curve?
A) Cournot B) Stackelberg C) Monopoly D) Perfect competition
An oligopolistic firm that is deciding the price to charge, the output to produce, or the quality of product to offer, must consider
a. the regulatory price limits that are always present with oligopoly. b. the potential reactions of rivals in the market. c. the fact that per-unit costs will usually increase as the scale of production increases. d. that entry barriers into oligopolistic markets are low.
Very few players are drafted into the NFL when they play at Division II or Division III schools whereas more players are drafted in the MLB from these schools. What can explain this?
A) Attending a Division II or Division III school sends a stronger signal of future and present quality in the NFL. B) Attending a Division II or Division III school sends a weaker signal of future and present quality in the MLB. C) A signal of future and present quality is more important in the MLB than in the NFL. D) Attending a particular school is like a screening test for life insurance.