Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product.
Suppose Acme and Mega decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Mega cheats on the agreement by reducing its price to $1 and Acme matches the price cut, then if consumers are evenly split between the two firms, Acme's economic profit will be ________.
A. $75
B. $150
C. $200
D. $100
Answer: A
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Monopolistic competition is characterized by many buyers and sellers, product differentiation, and barriers to entry
a. True b. False Indicate whether the statement is true or false
If Gordon’s average tax rate is 10 percent when he earns $100 and his average tax rate is 10.25 percent when he earns $101, then
A. his marginal tax rate is 0.25 percent. B. his marginal tax rate is 35.25 percent. C. his marginal tax rate is 25.25 percent. D. his marginal tax rate is 25 percent.
If a country imposes a tariff on imported shoes, we expect the domestic price of shoes to _______ and the quantity of shoes consumed in the domestic market to _______ .
A) fall; fall B) fall; rise C) rise; fall D) rise; rise
The price of a barrel of oil doubled between 2007 and the middle of 2008. To make matters worse, a financial crisis hit the U.S. economy starting in August of 2007
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