What is the deadweight loss due to profit-maximizing monopoly pricing under the following conditions: The price charged for goods produced is $10 . The intersection of the marginal revenue and marginal cost curves occurs where output is 100 units and
marginal revenue is $5 . The socially efficient level of production is 110 units. The demand curve is linear and downward sloping, and the marginal cost curve is constant.
1/2*(110-100)*($10-$5) = $25
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Price elasticity is a measure of how
A. much a market responds to a change in market conditions. B. much consumers or producers respond to a change in market price. C. quickly consumers or producers respond to a change in market price. D. quickly a market will respond to a change in market conditions.
Molly needs 30 minutes to wash the car and 45 minutes to mow the lawn. Renee needs 1 hour to wash the car and 2 hours to mow the lawn. Which of the following statements is correct?
a. Molly should specialize in both tasks. b. Renee should specialize in both tasks. c. Each woman should specialize in the task in which she has the absolute advantage. d. Absolute advantage is not an appropriate guide for determining specialization. e. Neither woman should specialize.
All else equal, which of the following would tend to cause real GDP per person to rise?
a. a change from inward-oriented policies to outward-oriented policies b. an increase in investment in human capital c. strengthening of property rights. d. All of the above are correct.
If the productivity of labor diminishes only slowly as output increases, labor:
A. demand will most likely be elastic. B. supply will most likely be elastic. C. demand will most likely be inelastic. D. supply will most likely be inelastic.