The fire department receives its revenues from the government budget, not on a per-fire-extinguished basis. As a result, it is difficult for department officials to know if
a. the fire department is even needed
b. too much or too little fire protection is being supplied
c. fires should be extinguished
d. they should raise or lower price
e. keep the difference between revenues and costs
B
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As the dollar exchange rate, e, increases, the quantity of dollars supplied in the foreign exchange market ________, and the quantity of dollars demanded in the foreign exchange market ________.
A. decreases; increases B. increases; increases C. decreases; decreases D. increases; decreases
A firm charges each customer the highest price that customer will pay for the marginal unit under
a. perfect competition b. oligopoly c. monopolistic competition d. single-price monopoly e. perfect price discrimination
The supply curve for a particular bond is horizontal
a. True b. False
Answer the following statements true (T) or false (F)
1. Predatory pricing, such as the high price of pharmaceuticals, is legally protected under patent law. 2. If a monopolist chooses a low level of output, it can charge only a relatively low price. 3. In the real world, a monopolist can use marginal revenue and cost information to determine the profit-making combination of quantity and price because information on total revenues and costs is often not available. 4. Allocative efficiency refers to producing the optimal quantity of some output, the quantity where the marginal benefit to society of one more unit just equals the marginal cost. 5. One type of an imperfectly competitive market is called monopolistic competition. Monopolistically competitive markets feature a large number of competing firms, but the products that they sell are not identical.