Market power allows firms to raise prices significantly above the competitive level.
Answer the following statement true (T) or false (F)
True
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Compare the equilibrium output in a duopoly to the monopoly output
A firm can sell 14 units at $18, but to sell 15 units, the firm must cut the price to $17. The marginal revenue derived from selling the 15th unit is
A. -$18. B. 0. C. $3. D. $17.
When a firm engages in price discrimination, it sets marginal revenue equal to marginal cost for each separate set of consumers.
Answer the following statement true (T) or false (F)
How is the economic perspective reflected in lines for fast food?
A. Customers select the shortest line because they have perfect information. B. Lines will typically be of unequal length because of the inefficiencies in counter service. C. The set of food choices is often too complex for customers and thus creates long lines. D. Customers select the shortest line because they believe it will reduce their time cost of obtaining food.