The technique that estimates long-run costs and the minimum efficient scale by determining the scale of operation at which most firms in an industry are concentrated is called the:
A) engineering estimation technique.
B) statistical cost estimation technique.
C) survivor approach.
D) back-of-the-envelope approach.
C
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What are marketable permits? Suppose there are two firms in an area, each emitting tons of sulfur. The government decides on a target level of 200 tons of sulfur, and gives each firm a permit to emit 100 tons of sulfur
Suppose Firm A is very efficient and can reduce pollution by 100 tons with an abatement cost of $500. Firm B has an older plant, so it will cost Firm B $1,000 to reduce emissions by 100 tons. What will occur with marketable permits?
All these are motivations for tie-in-sales except,
a. Efficiency b. Assure quality c. Provide secret price discounts d. All the above
Suppose the Clean Air Act calls for a rise in NO2 abatement (A) from 50 to 60 percent and that the MSC (in millions) is MSC = 12 + 0.8A, where A is measured in percent. Then, the incremental cost of this policy change is
a. $8 million c. $560 million b. $40 million d. $500 million
The prisoner's dilemma is a theoretical tool with little in the way of practical applications.
Answer the following statement true (T) or false (F)