Refer to Figure 15-19 to answer the following questions
a. What quantity will this monopoly produce and what price will it charge?
b. Suppose the monopoly is regulated. If the regulatory agency wants to achieve economic efficiency, what price should it require the monopoly to charge?
c. To achieve economic efficiency, what quantity will the regulated monopoly produce?
d. Will the regulated monopoly make a profit if it charges the price that will achieve economic efficiency?
e. Suppose the government decides to regulate the monopoly by imposing a price ceiling of $35. What quantity will the monopoly produce and what price will the monopoly charge?
f. With the price ceiling of $35, what profit will the monopoly earn?
a. Quantity = 835 units and Price = $59.
b. To achieve economic efficiency, the price = $20.
c. The quantity produced = 2,204 units.
d. No, the regulated monopoly will make a loss.
e. If the ceiling price is set at $35, the monopoly will produce a quantity of 1,740 units and charge the ceiling price of $35.
f. The monopoly will break even.
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Two advisors to the president have given their policy recommendations, and they are in disagreement. Why do these economists disagree?
A. Because they do not have all relevant information about the problem B. Because they disagree on the nature of some cause–effect relationship C. Because they have different values and opinions D. All of the above are reasons for disagreements among economists.
A sale of securities by the Fed causes
A) a contraction of the money supply equal to the amount of the securities sold. B) an expansion of the money supply equal to the amount of the securities sold. C) a multiple expansion of the money supply greater than the amount of the securities sold. D) a multiple contraction of the money supply greater than the amount of the securities sold.
Ray's company just announced that everyone will be getting their pay cut by 5% in order to avoid having to close down. Ray's demand for coffee, a normal good, will likely:
A. decrease, and his demand curve will shift to the left. B. increase, and his demand curve will shift to the right. C. increase, and his demand curve will shift to the left. D. decrease, and his demand curve will shift to the right.
Refer to the information provided in Table 14.4 below to answer the question that follows. Table 14.4B's Strategy ?Raise PriceDon't Raise Price?RaiseA's profit $6,000A's profit $20,000?PriceB's profit $6,000B's profit $30,000A's Strategy????Don'tA's profit $30,000A's profit $10,000?RaiseB's profit $20,000B's profit $10,000Refer to Table 14.4. Firm A does not have a dominant strategy.
Answer the following statement true (T) or false (F)