When the supplier of an artificially scarce good charges a price greater than zero, then the:
a. good becomes nonexcludable.
b. supplier reduces producer surplus from what it would be if the price were zero.
c. supplier reduces consumer surplus from what it would be if the price were zero.
d. supplier gives rise to the free-rider problem.
Ans: c. supplier reduces consumer surplus from what it would be if the price were zero.
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Which of the following best describes a good with perfectly elastic supply?
A) Any increase in the price of the good leads to an increase in the seller's revenue. B) Any increase in the price of the good decreases the quantity supplied of the good by more than the price change. C) Any increase in the price of the good will induce the firm to supply an infinite quantity of the good. D) Any increase in the price of the good increases the quantity supplied of the good exactly by the amount of the price change.
Unions are often able to sustain wages above the equilibrium wage because they can threaten to
Based on the demand and marginal revenue curves for the monopolist, ______.
a. marginal and average revenue are the same thing
b. marginal and average revenue drop at the same rate
c. average revenue drops faster than marginal revenue
d. marginal revenue drops faster than average revenue
Which of the following statements concerning a monopolist is FALSE?
A. A monopolist will charge the highest price at which any individual will purchase the product. B. For a monopolist, marginal revenue is less than price. C. A monopolist will shut down if price is less than average variable cost. D. A monopolist will produce at which MR = MC.