If a pure monopolist can price discriminate by separating buyers into two or more groups:
A. the marginal revenue curve and the total revenue curve will now coincide.
B. the marginal revenue curve will now shift to a position above the demand curve.
C. the firm will face multiple marginal revenue curves.
D. marginal revenue will become less at each level of output than it would be without price
discrimination.
Answer: C
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Refer to the scenario above. Suppose Pat can impose a fine of $70 if Joe chooses to keep the money and the cost of imposing such a fine to Pat is $10. Which of the following is likely to happen if Pat is known to be vengeful?
A) Joe will choose to split the money into two parts if Pat gives it to him. B) Joe will choose to keep the entire money for himself if Pat gives it to him. C) Pat will not give the money to Joe. D) An unique equilibrium will not occur.
In the above figure, the imposition of a $0.25 sales tax on sellers will
A) raise the market price paid by buyers of hotdogs by $0.25. B) lower the market price paid by buyers of hotdogs by $0.25. C) raise the market price paid by buyers of hotdogs by $0.125. D) have no effect on the market price of hot dogs.
Use the following two statements in answering this question: I. For all Giffen goods the substitution effect is larger than the income effect. II. For all inferior goods the substitution effect is larger than the income effect
A) I and II are true. B) I is true, and II is false. C) I is false, and II is true. D) I and II are false.
If three firms of similar sizes join to form a cartel, then it is most likely that
A) they will charge a common, higher market price. B) they will collectively produce more than before. C) all three firms will stop producing. D) all three firms will earn zero profits.