Refer to Figure 7-22. Assume demand increases, which causes the equilibrium price to increase from $50 to $70. The increase in producer surplus would be
a. $2,500.
b. $800.
c. $1,600.
d. $900.
c. $1,600.
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Consider the demand function Qd = 150 - 2P. The effects of other determinants of Qd is reflected in
A) the intercept of the function. B) the slope of the function. C) neither the slope nor the intercept of the function. D) in both the slope and the intercept of the function.
If a natural monopolist is unregulated, then
A) the monopoly will produce efficiently from society's point of view. B) the monopoly will produce inefficiently from society's point of view. C) the monopolist will be earning just a normal rate of return on investment. D) the monopolist will determine the profit maximizing quantity by equating marginal cost to the demand curve.
Arbitrage
a. Is the act of to buying low in one market and selling high in another market b. Can force a seller to go back to uniform pricing c. Can offset the benefits of direct price discrimination d. All of the above
When Glaxo-Wellcome introduced AZT, an AIDS drug, it was able to enjoy high profits because:
a. the drug was highly recommended by doctors. b. of the quick response of rivals in introducing substitute drugs. c. of barriers to entry provided by patents. d. of its competitive price in the pharmaceutical industry. e. it experienced constant returns to scale in the long run.