Refer to Monopoly Supplier and Manufacturer. After the merger, the leather company will earn surplus of
The following questions refer to the accompanying diagram, which shows a monopoly leather supplier selling leather to a monopoly shoe manufacturer. The leather supplier initially produces QM and charges the shoe manufacturer PM. Then the leather supplier acquires the shoe manufacturer in a vertical merger.
a. Area A + B.
b. Area A + B + C + D + E.
c. Area F + G + H.
d. Area A + B + C + D + E + F + G + H.
d. Area A + B + C + D + E + F + G + H.
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The First Welfare Theorem holds that the allocation of goods resulting from competitive prices is "efficient," which is the equivalent of "equitable."
Answer the following statement true (T) or false (F)
If a firm's output less than doubles when all inputs are doubled, production is said to occur under conditions of
A) increasing returns to scale. B) imperfect competition. C) intra-industry equilibrium. D) constant returns to scale E) decreasing returns to scale.
In a Bertrand duopoly with product differentiation, explain how a change in one firm's marginal cost can have an effect on the price charged by the other firm
What will be an ideal response?
Examine Figure 37.1. What is the number of students educated in a market that has a subsidy equal to the external benefit? 
Figure 37.1
A. S* B. S' C. All who have any desire for it D. The answer is unknown from this diagram.