A monopolist faces the inverse demand curve P = 60 - Q. It has variable costs of Q2 so that its marginal costs are 2Q, and it has fixed costs of 30. The monopoly's maximum profit is
A) 220.
B) 370.
C) 420.
D) 510.
C
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The figure above shows the market for college education in the United States. If the government does not intervene in this market, the deadweight loss equals ________ per year
A) $28 billion B) $14 billion C) $280 billion D) $224 billion E) $7 billion
A transaction between A and B benefits both parties by 50, but imposes a cost on C of 20. C has the right to prevent the transaction. A "coordination failure" in this situation
A) is the cost imposed on C. B) is the ability of C to prevent a transaction that still has a net overall gain of 80. C) would occur if A and B do not compensate C by 20 or more to allow the transaction. D) is that the cost to C is not 100.
In a perfectly competitive labor market, the wage rate paid by the individual firm is
A. the equilibrium market wage rate. B. a function of the tax system. C. below the equilibrium market wage rate. D. dependent on the demand for the product.
Quotas and tariffs both serve the purpose of
A. lowering prices on imported goods. B. causing domestic producers to lose revenues. C. restricting foreign trade. D. increasing foreign trade.