People who need life-saving drugs cannot do without them and surely will be willing to pay very high prices for them. So why can't producers of life-saving drugs charge any price that they wish?
What will be an ideal response?
The monopolist is powerful but cannot sell at a point beyond the market demand curve; a monopoly cannot set any price it wishes to because it faces a downward-sloping market demand curve. With an increase in price, the firm will sell a smaller number of units but will gain more revenue per unit sold. With a decrease in price, the number of units sold will increase but the revenue per unit will fall.
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Among the advantages of the least-squares trend analysis techniques is
A) the ease of calculation. B) relatively little analytical skill required. C) its ability to provide information regarding the statistical significance of the results. D) All of the above
If the government places a $0.50 tax on an item for which demand is perfectly elastic
A) the entire tax will be paid by the consumer. B) the tax will be split equally between the consumer and producer, with each paying exactly $0.25. C) most of the tax will be paid by the consumer. D) the entire tax will be paid by the producer.
When one person knows more than another, it creates a situation:
A. in which the transaction is always regretted. B. called information asymmetry. C. in which the transaction will not occur. D. called information dominance.
Net benefit is equal to total benefit minus marginal cost
a. True b. False Indicate whether the statement is true or false