The output level produced by a profit-maximizing monopolist:
a. exceeds the level that would maximize social welfare.
b. is allocatively efficient.
c. is less than the level that would maximize social welfare.
d. always results in economic profits in the long run.
c
You might also like to view...
How do current tax laws in the United States favor employer-based health care insurance?
A) Individuals who receive health insurance benefits are allowed to deduct the value of these benefits from their taxable income. B) Individuals who receive health insurance benefits do not pay taxes on the value of these benefits. C) Employers who provide health insurance benefits are reimbursed by the government and are not taxed on these reimbursements. D) Health insurance companies that provide insurance to employers are subject to a lower tax rate than those insurance companies that provide insurance to private individuals.
The Fed believes there are three advantages to using the personal consumption expenditures (PCE) price index instead of the CPI as a measure of inflation. These advantages include all of the following except
A) the PCE is a chain-type index as opposed to the market-basket approach used for the CPI, and the market-basket approach tends to overstate inflation. B) the PCE includes the prices of more goods and services than the CPI, so it is a broader measure of inflation. C) the PCE allows the Fed to better track historical trends in inflation than does the CPI because PCE values can be recalculated as new data becomes available. D) the PCE includes the value of imported products purchased by consumers , whereas the CPI does not, and imports make up a growing portion of consumer purchases in the United States.
What is the percentage of income received by the upper two quintiles on line K?
Refer to Scenario 13.1 below to answer the question(s) that follow. SCENARIO 13.1: The government of Catalina Island is currently inviting investors to bid for the exclusive right to provide cable television service to its residents. The market demand for this service is P = 55 - 0.01Q, where Q is the number of households that would subscribe to the cable service and P is the monthly fee charged to the subscribers. The associated marginal revenue curve is MR = 55 - 0.02Q. Universal Entertainment is interested in bidding for the right to provide cable service on Catalina Island. It has a constant average and marginal cost of $15 for providing cable service to each household.Refer to Scenario 13.1. If Universal Entertainment were to be awarded the exclusive right to provide cable
service on Catalina Island, what price would it charge per household per month? A. $15.00 B. $27.50 C. $35.00 D. $55.00