Double marginalization (first encountered in Chapter 4) complicates access pricing in telecommunications
Indicate whether the statement is true or false
T Double marginalization motivates one party in the chain of service to a consumer to choose inefficient prices, and it arises naturally in telephone networks.
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Moving along the aggregate demand curve, a decrease in the quantity of real GDP demanded is a result of
A) an increase in the price level. B) a decrease in the price level. C) an increase in income. D) a decrease in income.
Economic profit is
A) revenue - variable costs + fixed costs. B) revenue + variable costs - fixed costs. C) revenue - variable costs - fixed costs. D) revenue/cost of capital.
By making involuntary exchanges illegal,
a. criminal law eliminates such exchanges b. tort law contributes to economic efficiency c. criminal law channels energies into activities that benefit everyone d. criminal law reduces producer surplus while increasing consumer surplus e. antitrust law contributes to monopolization of markets
The percentage of the burden of an excise tax that is borne by sellers generally depends on the
a. size of the tax. b. relationship between the elasticity of demand and the elasticity of supply. c. elasticity of demand. d. elasticity of supply.