If I use 1,000 gallons of water a month at a price of $.01 a gallon, is my consumer surplus likely to be large or small? Explain
The 1,000th gallon will yield no consumer surplus, since MU = P is the decision rule for optimal purchases. But since MU declines, all gallons before 1,000 will yield CS. The first gallons will have particularly high CS, since if I had to forgo any drinking water, water for showers, and water to keep my plants alive, I would lose a lot of utility. In sum, CS is likely to be large.
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Incentive goods are
a. manufactured goods for consumption by farmers b. manufactured inputs for farm production c. agricultural goods that can be sold in the cities d. agricultural goods that are left for consumption in the rural areas e. none of the above
To prevail in a Section 2 case of the Sherman Act, the plaintiff must satisfy all of the following requirements except which one?
A) The plaintiff must demonstrate that the defendant's success is due to unreasonable exclusionary, predatory, or other unreasonable anticompetitive conduct. B) The plaintiff must establish that the defendant has a large market share. C) The plaintiff must establish that the defendant has competed on the basis of product desirability. D) The plaintiff must appropriately define the defendant's product and geographic market.
For a profit-maximizing monopolist,
a. P > MR = MC. b. P = MR = MC. c. P > MR > MC. d. MR < MC < P.
The monopolist can earn long-run profits even if it is not insulated with barriers to entry
Indicate whether the statement is true or false