A price-taking firm and a monopolist are alike in that ______.
a. price equals marginal revenue for both
b. both maximize profits by choosing an output where marginal revenue equals marginal cost, provided that price exceeds average variable cost
c. price exceeds marginal cost at the profit-maximizing level of output for both
d. in the long run, both earn zero economic profits
Answer: b. both maximize profits by choosing an output where marginal revenue equals marginal cost, provided that price exceeds average variable cost
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Discounted tickets for children into events is what type of price discrimination?
A. First-degree price discrimination. B. Second-degree price discrimination. C. Third-degree price discrimination. D. It is not price discrimination.
A game in which the players explicitly coordinate their decisions to make themselves better off is a
A) cooperative game. B) noncooperative game. C) zero-sum game. D) negative-sum game.
When decision rights are decentralized, typically
a. decisions are being moved to those with less of the relevant information b. decisions are being moved to those with stronger incentives to make good decisions c. decisions are being moved to those with more of the relevant information d. decisions are being moved from those with weaker incentives to make good decisions
If the marginal cost of producing a public good is less than society's total willingness to pay per unit, then
A. the optimal amount of the public good is being produced. B. more than the optimal amount of the public good is being produced. C. less than the optimal amount of the public good is being produced. D. the amount of output being produced could be either greater than or less than the optimal amount.