"The deadweight loss of a monopoly equals the monopoly firm's profits." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. The deadweight loss from a monopoly is the portion of consumer surplus loss that no one in society can obtain. The monopoly firm's profits represent a transfer of consumer surplus away from consumers to the monopolist, and so profits are not a deadweight loss.
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The elasticity measure that has been employed by the courts to assess the degree of market competition is
A. price elasticity of demand. B. income elasticity of demand. C. cross elasticity of demand. D. inverse elasticity of demand.
If the price level in the U.S. is 120, the price level in South Africa is 140, and the nominal exchange rate is 7 South African rands per dollar, then the real exchange rate is
A) 6 South African goods per U.S. good. B) 8.4 South African goods per U.S. good. C) 9.8 South African goods per U.S. good. D) 1.4 South African goods per U.S. good.
Based on the figure, if a union contract requires that workers be paid $25 per hour, there will be ________ unemployed workers.
A. 31 B. 9 C. 12 D. 21
In monopolistically competitive markets, product differentiation is a significant barrier to entry.
Answer the following statement true (T) or false (F)