A profit maximizing single-price monopolist charges a price equal to
A) average total cost.
B) marginal revenue.
C) the highest price consumers are willing to pay for the profit maximizing quantity.
D) the price necessary for the firm to earn a normal return on its investment.
C
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What consumer surplus is received by someone whose willingness to pay is $35 below the market price of a good?
A. $35 B. $0 C. ($35 x P*) D. None of these is correct.
Fred runs a fishing lodge and has a very profitable business during the summer. In the fall, the number of guests at the lodge starts to decline. Fred should keep the lodge open:
A. only during those months in which his total revenue exceeds his fixed cost. B. all year because his summer profits offset any losses he might have in the winter. C. only during those months in which his total revenue exceeds his total cost. D. only during those months in which his total revenue exceeds his variable cost.
Voters' Ordered PreferencesAbbyBobCarloPublic parksPublic zooPublic transportationPublic zooPublic transportationPublic parksPublic transportationPublic parksPublic zooIf a pair-wise majority vote was held, the voters' preferences are shown in the table, and Bob is setting the agenda for votes, which pair will he put up for vote first?
A. Public parks and transportation B. Public transportation and public zoo C. It will not matter, as it will not affect the outcome of the voting. D. Public zoo and public parks
Because a price ceiling causes:
A. a surplus, the outcome will be inefficient. B. a shortage, some form of rationing must occur. C. a surplus, some form of rationing must occur. D. a shortage, the outcome will be efficient.