Deadweight loss exists when a firm with market power restricts what to increase the price?
a. costs
b. allocative efficiency
c. output
d. none of the above cause the price to increase
c
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According to the kinked demand curve model, regardless of whether a firm increases or decreases price, its total revenues will decrease as a result of the price change
Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1) If your firm has a random demand, producing at the level that maximizes your expected profit will earn the same profit as the profit-maximizing production level with a known demand. 2) If a firm's demand is random, the firm's price and profit are also random. 3) If a perfectly competitive firm has a random demand and known marginal cost, producing at a level that sets expected price equal to marginal cost minimizes the reduction in expected profit. 4) If a firm's demand is known, but has random costs, it cannot maximize its actual profit. 5) When both demand and cost are random, firms cannot maximize expected profit.
U.S. imports rise when income in the United States increases
a. True b. False Indicate whether the statement is true or false
After September 11, 2001, a small group of economists argued that the economy's self-correcting mechanism would work to counteract the recessionary effects of the attack
a. True b. False Indicate whether the statement is true or false