Refer to the diagram. The quantitative difference between areas A and C for reducing the price from P 1 to P 2 measures:
A. marginal cost.
B. marginal revenue.
C. monopoly price.
D. a welfare or efficiency loss.
B. marginal revenue.
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In a monopoly, producers ________ and consumers ________
A) gain; lose B) lose; lose C) lose; gain D) gain; gain E) gain; do not gain or lose
Time lags
What will be an ideal response?
If the price of a good falls by 10% and the percentage decrease in the total amount consumers spend on the good is 10%, then the good is
A. unit elastic. B. elastic. C. inelastic. D. perfectly inelastic.
Suppose there are 100 identical firms in the rag industry, and each firm is willing to supply 10 rags at any price. The market supply curve will be a
A) vertical line where Q = 10. B) vertical line where Q = 100. C) vertical line where Q = 1000. D) horizontal line where Q = 1000.