At the current price of a good, Al's consumer surplus equals 15 and Ben's consumer surplus equals 15. By using two-part pricing, a monopolist could increase his profit by
A) 8.
B) 16.
C) 15.
D) 30.
D
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Based on the figure above, curve D is the firm's
A) marginal cost curve. B) total cost curve. C) average total cost curve. D) average variable cost curve. E) average fixed cost curve.
Suppose scientific research generates external benefits. Without government intervention, the market for scientific research would
A) produce the efficient amount. B) produce more than the efficient amount. C) produce some research, but less than the efficient amount. D) produce zero research. E) either produce more than or less than the efficient amount depending on whether the external benefit is on the production or consumption of the research.
The false assumption that what is true for a part will also be true for the whole is called the:
A. paradox of thrift. B. fallacy of composition. C. post hoc fallacy. D. ceteris paribus assumption.
If a firm?s demand curve is ________, then at the profit-maximizing level of output P = MR = MC.
A. relatively elastic B. relatively inelastic C. perfectly inelastic D. perfectly elastic