The perfectly discriminating monopolist will produce the
(a) quantity at which average cost exceeds marginal revenue.
(b) quantity at which marginal cost equals average cost.
(c) quantity at which marginal revenue equals marginal cost.
(d) quantity and price which is not necessarily profit-maximizing but in the
best interest of society at large, even if it means loss.
(c)
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Suppose the long-run supply curve for a perfectly competitive industry is horizontal at a price of $12, and the minimum short-run average variable cost for each of the identical N firms in the industry is $8
If the demand curve for the industry decreases so that it intersects the short-run supply curve of the industry at $10, A) in the short run the price will decrease to $10, and the number of firms will still be N. In the long run the price will return to $12, and the number of firms will be less than N. B) in the short run the price will decrease to $10, and the number of firms will be less than N. In the long run the price will return to $12, and the number of firms will return to N. C) in the short run the price will remain at $12, and the number of firms will still be N. In the long run the price will fall to $8, and the number of firms will be less than N. D) In the short run the price will decrease to $10, and the number of firms will be less than N. In the long run the price will return to $12, and the number of firms will return to N.
Fiscal policy changes in government spending and taxes primarily target the aggregate supply curve.
Answer the following statement true (T) or false (F)
According to the U.S. Robinson - Patman Act of? 1936, price discrimination
A. may be used to drive rivals out of business. B. is always illegal. C. can only be justified if the price discrimination is due to actual cost differences. D. is legal unless it harms competition.
The imperfect capital market justification for infant industry promotion
A) assumes that new industries will tend to have low profits. B) assumes that infant industries will soon mature. C) assumes that infant industries will be in products of comparative advantage. D) assumes that banks can allocate resources efficiently. E) assumes that developing country will reward the donor country.