Since marginal revenue is less than price for a monopolist, a monopolist maximizes profits by equating marginal revenue and marginal cost, not price and marginal cost.
Answer the following statement true (T) or false (F)
True
Price equals marginal revenue for purely competitive firms only, not for monopolies.
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The difference between private cost and social cost is that
A) social cost only considers the external cost borne by society. B) social cost only considers the cost borne by people other than the producer. C) private cost only considers the cost borne by producers of the good. D) social cost also includes any external benefit whereas private cost excludes all external benefits. E) There is no difference; the terms refer to the same cost.
Attempts to fine-tune the economy through counter-cyclical monetary policy
A) demonstrated their effectiveness in the 1930s. B) demonstrated their effectiveness during World War II. C) demonstrated their effectiveness between 1945 and 1960. D) have not yet demonstrated their effectiveness.
The federal income tax in the United States is
A) regressive. B) proportional. C) progressive. D) a flat-rate tax.
Which of the following sellers is most able to perfectly price discriminate?
A) a college or university B) the post office C) a clothing store D) a grocery supermarket