Regardless of whether a tax is levied on sellers or buyers, taxes encourage market activity
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose that a regulatory agency has imposed marginal cost pricing on a natural monopolist. We expect that
A) the firm will earn only a normal profit. B) the firm's average total cost of production is rising over the relevant range of production. C) the firm will earn economic profits. D) the firm will eventually go out of business.
An industry in which an increase in output leads to a reduction in long-run per-unit costs is a(n)
A) increasing-cost industry. B) constant-cost industry. C) break-even cost industry. D) decreasing-cost industry.
If a firm can create important complements to its original product, it has
a. Created an uncontrollable factor that can change the demand for its product b. Created an uncontrollable factor that cannot change the demand for its product c. Created a controllable factor that can change the demand for its product d. Created a controllable factor that cannot change the demand for its product
By integrating vertically,
a. firms trade with one another through markets b. firms trade with one another through government intermediation c. firm and market processes are connected to produce a good or service most efficiently d. the various procedures involved in producing a good are collected within one firm e. the various procedures involved in producing a good are parceled out among various contractors