Question

Question 1 True or false? (2 points) A positive externality does not lead to a deadweight loss because more of the a. good should be produced, not less. b. (2 points) Economies of scale and limited demand can form a natural barrier to entry that can create a natural oligopoly. (2 points) The Coase theorem implies that we never need to worry about regulating c. negative externalities as long as we only assign property rights to the polluter. d. (2 points) An oligopoly market is a market with two firms and barriers to entry. (2 points) A Nash Equilibrium occurs when all players receive their highest payoff. e.

Answer 1

A) :-- false a positive externality does not lead to dead weight loss because more of the good should be produce, not less because

•less produce and consumed by people than social optimal level.

B) :-False economies of scale and limited demand can form a natural barrier to entry that can create a natural oligopoly.

•economis of scale create monopoly.

• if demand is limited no one want to produce that product . Profit is base motive of each producer.

C) :-false the coase theorm implies that we never need to worry about regulating negative externalities as long as we Only assign property rights to the polluter.

D) :- false an oligopoly market is a market with two firms and barriers to entry.

• because their are some firm or may be may be two not exactly two firms their are may be four or five in number.

E) :-false a nash equilibrium occure when all players receive their highest payoff.

• it is for each player who satisfied two conditions not for all that is

•action yield highest payoff for that predictor who predict for other.

• prediction for other actions are correct.