Refer to the graph shown. If regulators wanted this monopolist to earn only a normal profit, they would set price equal to:
A. $3.
B. $12.00.
C. $2.
D. $8.
Answer: A
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A) non-excludable and non-rival B) excludable but non-rival C) excludable and rival D) non-excludable but rival
Explain why the cross elasticity of demand for substitute goods is positive and the cross elasticity of demand for complements is negative
What will be an ideal response?
If an exhaustible resource is scarce, has constant marginal cost over time, and is sold in a competitive market, then
A) its price increases over time. B) its price will not be a function of the interest rate. C) its price moves independently of past prices. D) its price equals marginal cost.