If an unregulated electric company is a monopolist, faces demand of Q = 100 - 50P, and has a constant marginal cost of 1, the profit-maximizing price is
a. 0
b. 1
c. 1.5
d. 2
b
You might also like to view...
Which of the following would NOT be associated with the LATE PHASE of the product cycle?
A) Consumption in high income countries begins to exceed production. B) Increasing share of output is moving to developing countries where abundant low skilled and semi-skilled labor keep production costs low. C) Consumption continues to grow in low income countries. D) There is experimentation and improvement in design and manufacturing.
Classical economists believe that
A) money is neutral. B) an increase in the real money supply affects output. C) inflation is determined by wage growth. D) monetary policy should be used to combat recessions.
When the supply of land is perfectly inelastic, the economic burden of an annual tax on land
a. falls entirely on the people who owned land when the tax was imposed. b. is passed on to future buyers of land in the form of higher prices. c. is split between present and future landowners. d. cannot be determined without information on the elasticity of the demand for land.
The joining of two or more firms competing in the same market with the same good or service:
a. Stockholm enterprise b. partnership c. vertical merger d. horizontal merger e. Pineapple Ring