Granting exclusive territories to distributors:
A. discourages double markups and encourages free-riding.
B. discourages free-riding but generates double markups.
C. encourages double markups and free-riding.
D. discourages double markups and free-riding.
Answer: B
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A perfectly competitive firm need never consider
a. price because it cannot control price b. its fixed cost because it cannot shut down c. its market share because advertising keeps it competitive d. the effect of its own production on price e. barriers to entry because the barriers never change
An import quota will make the supply curve for the imported good
A) perfectly inelastic. B) perfectly elastic. C) unitary elastic. D) negatively sloped.
If a consumer allocates income between goods A and B, total utility is maximized when
a. the marginal utility of A = the marginal utility of B b. the marginal utility of A = the marginal utility of B = 0 c. the price of A = price of B d. marginal utility of A/price of A = marginal utility of B/price of B = 0 e. marginal utility of A/price of A = marginal utility of B/price of B
The average consumer at a firm with market power has an inverse demand function of P = 10 ? Q. The firm's cost function is C = 2Q. If the firm engages in two-part pricing, what is the optimal fixed fee to charge each consumer?
A. $64 B. $2 C. $32 D. None of the answers are correct.