An unregulated industry has a Lerner index of zero. These numbers:
A. reveal that social welfare would be improved by regulating the firms.
B. are consistent with the industry being monopolistically competitive.
C. reveal that social welfare would be improved by regulating the firms and are consistent with the industry being monopolistically competitive.
D. are consistent with the industry being perfectly competitive.
Answer: D
You might also like to view...
You produce stereo components for sale in two markets, foreign and domestic, and the two groups of consumers cannot trade with one another. If your firm practices third-degree price discrimination to maximize profits, the marginal revenue
A) in the foreign market will equal the marginal cost. B) in the domestic market will equal the marginal cost. C) in the domestic market will equal the marginal revenue in the domestic market. D) all of the above E) none of the above
According to the infant-industry argument, protection should be withdrawn from an infant industry when the companies in the industry
A) are listed on the domestic stock exchange. B) become profitable. C) double their sales revenues. D) reach a sufficient size to compete with foreign firms.
As the prevailing interest rate decreases, the opportunity cost of spending money
A. Decreases for both saver and borrower. B. Increases for both saver and borrower. C. Increases for the borrower and decreases for the saver. D. Decreases for the borrower and increases for the saver.
When there is a surplus of a product in a market the:
A. price will rise. B. price must be above the equilibrium price. C. producers will expand output and sales will rise. D. price must be below the equilibrium price.