Consider the figure? 4B-2. If the price is? $20, find the area that represents producer surplus.
A. Upper A plus Upper B.
B. Upper C plus Upper D.
C. Upper A plus Upper B plus Upper C.
D. Upper F plus Upper E plus Upper D.
Answer : C. Upper A plus Upper B plus Upper C.
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One argument for having the government regulate natural monopolies is that without regulation ________.
A. the industry would become perfectly competitive and there would be too many firms in the market to achieve efficiency B. these monopolies produce at a level where price is greater than marginal cost C. these monopolies produce at a level where price is less than marginal cost D. these monopolies usually produce things that are potentially harmful to our health
Economists call the influences of the decisions of others on our decisions ________
A) peer effects B) moral hazard C) externalities D) cluster effects
An example of a good that is not excludable is:
A. fish in the ocean. B. wireless connection to the Internet. C. a movie in a theater. D. a candy bar.
The graph above shows the average cost, marginal cost, demand, and marginal revenue curves for a monopoly firm. The maximum possible profit the firm can earn per day is
a. $240 b. zero c. $120 d. $60