Deadweight loss is
A. the amount of taxes that consumers and monopolists pay.
B. the price that consumers pay for a product in excess of the average cost of producing it.
C. the loss of output when a perfectly competitive firm becomes a monopolist.
D. a loss of benefit to consumers in a monopoly that no one else in society can obtain.
Answer: D
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The government defines the poverty line as
A. the lowest income quintile (20%). B. those receiving public assistance or eligible for public assistance. C. anyone who does not have to pay federal income tax. D. a minimum dollar amount of income, depending on family size.
Which of the following is always associated with monopolistic competition?
A. identical products B. economic profits in the short run C. product differentiation D. Demand curves become more inelastic as new entry occurs.
A local doughnut shop reduced the price of its doughnuts from $4 per dozen to $3.50 per dozen, and as a result, the daily sales increased from 300 to 400 dozen. This indicates that the price elasticity of demand for the doughnuts was:
A. elastic. B. inelastic. C. unitary elastic. D. indeterminate; more information is needed to determine the price elasticity of demand.
Refer to the above graph. It shows short-run cost curves for a competitive firm. At what price would the firm break even?
A. P1 B. P2 C. P3 D. P4