A monopolist that does not practice price discrimination should never produce in the
A. Inelastic portion of its demand curve because it can increase total revenue and reduce total costs by increasing the price.
B. Segment of its demand curve where the price elasticity of demand is greater than 1.
C. Inelastic portion of its demand curve because it can increase total revenue by more than it increases total cost by reducing the price.
D. Elastic portion of its demand curve because it can increase total revenue and reduce total costs by lowering the price.
Answer: A
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The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. At Kaffenia's efficient quantity of chocolate
A) total consumer surplus is zero. B) total producer surplus is zero. C) the sum of consumer surplus and producer surplus is zero. D) the sum of consumer surplus and producer surplus is maximized.
Compared to an efficient perfectly competitive industry, the monopolist will
A) produce less output at a higher total cost. B) produce less output and charge a higher price. C) produce more output at a higher price and higher profit. D) produce more output at a lower price.
If the Fed increases the required reserve ratio at a time when banks are holding excess reserves, then: a. the Fed's aim is to increase the money supply
b. banks are likely to lend out more money than they would if the Fed left the reserve ratio alone. c. banks are likely to earn higher profits than they would. d. the money supply will not increase as much as it would if the Fed left the reserve ratio alone. e. the Fed's aim is to conduct open market operations without changing the money supply.
According to the efficient markets hypothesis, what changes the price of a share of a corporation's stock? Make up an example