Subsidizing firms that pollute will reduce pollution in the long run
a. True
b. False
Indicate whether the statement is true or false
False
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A major distinction between a monopolistically competitive firm and an oligopolistic firm is that
A. one is a price taker and the other is a price maker. B. one necessarily faces a downward-sloping demand curve and the other a horizontal demand curve. C. one always produces differentiated products and the other always produces a homogeneous product. D. a recognized interdependence exists between firms in one industry but not in the other.
Consider the following:
(i) Can a good have both a downward-sloping Engel curve and a downward-sloping demand curve? Why or why not? (ii) Can a good have both an upward-sloping Engel curve and an upward-sloping demand curve? Why or why not?
What is the nature of the elasticity of the demand curve faced by perfectly competitive firm?
A. Perfectly inelastic B. Perfectly elastic C. Unit elastic D. Highly elastic
Consider the market demand and supply given by the following: Qd=50 - P and Qs = 2.5 + 1.5P.
a) What is the equilibrium price and quantity? b) If the government sets a price floor of $25, what is the surplus/shortage? If the government buys the surplus, what would be the cost to the government?