Monopolies are socially inefficient because the price they charge is
a. equal to marginal revenue.
b. above marginal cost.
c. equal to demand.
d. above demand.
b
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The interest-rate-based transmission mechanism for monetary policy in the Keynesian system indicates that
A) decreases in the money supply lead to increases in the interest rate, which increases investment, which increases the level of real GDP. B) increases in the money supply cause people to spend more, leading to increases in real GDP. C) increases in the money supply lead to decreases in the interest rate, which decreases investment, which decreases the level of real GDP. D) increases in the money supply lead to decreases in the interest rate, which increases investment, which increases the level of real GDP.
Your company sells health food products, and you have recently developed a new high-protein drink (HPD) as well as a high-carbohydrate energy bar (HCE)
As the product manager for the firm, you are responsible for setting the pricing policy for the new products. You are considering a bundled package that includes both products, and you assume the marginal cost of production is zero for planning purposes. You have identified four basic types of consumers who may buy these new products, and their reservation prices for the two new products are provided in the following table: Type HPD HCE A $0.50 $1.80 B $0.80 $1.10 C $1.00 $0.90 D $1.40 $0.30 a. Suppose you sell the two products separately, and each buyer is expected to purchase one unit of the product per day. Which prices for HPD and HCE maximize daily revenue? What is your daily revenue from selling both products to the four customers under separate pricing? b. If you offer the two products under a pure bundling strategy, what is the revenue maximizing bundle price? What is the daily sales revenue from the pure bundling scheme? c. Please develop a mixed bundling strategy that generates higher daily sales revenue than the pure bundling strategy. What is the daily sales revenue generated under mixed bundling?
In a perfectly competitive market, a firm in long-run equilibrium will be operating
A) to the right of the minimum of the long-run average cost curve. B) to the left of the minimum of the long-run average cost curve. C) at the minimum of the long-run average cost curve. D) at the minimum of the marginal cost curve.
The use of government spending and taxation for the purpose of stabilizing the economy is called
A. budget policy. B. monetary policy. C. fiscal policy. D. trade policy.