Use Figure 13.2 which depicts a monopolist firm to help with the following question. Why would this firm not find it profitable to produce more than Qm or less than Qm?
What will be an ideal response?
A profit-maximizing monopolist will raise output as long as marginal revenue exceeds marginal cost. Maximum profit is at an output of Qm units per period and a price of Pm. Above Qm units of output, marginal cost is greater than marginal revenue and below Qm yields marginal revenue that is greater than marginal cost.
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Normative economics often takes a consequentialist philosophical approach to determine whether a policy is good. ?
Answer the following statement true (T) or false (F)
A firm is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5 . The firm can sell the 100th unit for $4.75 . The firm should continue to produce 100 units in order to maximize its profits (or minimize its losses)
a. True b. False Indicate whether the statement is true or false
The so-called "death tax" might
A) aim to alter endowments so as to attain an inefficient outcome. B) aim to alter endowments consistent with the First Theorem of Welfare Economics. C) aim to alter endowments consistent with the Second Theorem of Welfare Economics. D) aim to alter prices consistent with the First Theorem of Welfare Economics.
Which form of intellectual property protects an inventor?
A. Patent B. Copyright C. Trademark D. Copymark