Prime Pharmaceuticals has developed a new asthma medicine, for which is has a patent. An inhaler can be produced at a constant marginal cost of $2/inhaler
The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if Prime Pharmaceuticals operates as a single-price monopoly, then consumer surplus is ________ and producer surplus is ________. A) zero; $64 million
B) $32 million; $32 million
C) $16 million; $32 million
D) $16 million; $48 million.
C
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Holding other factors constant, an increase in the tax rate on revenue generated by capital will:
A. decrease national saving. B. increase national saving. C. increase investment. D. decrease investment.
What has been the main argument over recent efforts to replace the personal income tax with a value-added tax?
What will be an ideal response?
Suppose the production of a good results in negative externalities. If society produces the output consistent with the intersection of the demand curve and the marginal private cost curve, then
A. the socially optimal level of output will be produced. B. society will incur a net social cost. C. society will want more output produced, and producers will be willing to satisfy this desire at a price that society deems acceptable. D. all of the above E. There is not enough information to answer this question.
The short-run elasticity of supply is less than the long-run elasticity of supply
A) because consumers' tastes and preferences change in the long run but not in the short run. B) because producers can adjust the amount of machinery in the long run but not in the short run. C) only for durable goods. D) only for non-durable goods.