Homework Answers
48- C - This is known as free rider problem, everyone hopes that they don't have to pay for it and will get to use it anyway as it is non rival and non excludable.
50- C- Sum of CS and PS is maximised, as there are no
dead-weights losses.
56- D- Monopoly does not produce enough and this is the reason why
the prices are also high. Since, their is only one producer, it
will charge Output and price based on its profit maximisation
principle.
59- B- MR is always lesser than the price in a monopoly this
enables abnormal profits!
Let me know if any queries/ further explanations are required
Add Answer to:
48. Which statement explains why free markets fail to produce public goods? Firms do not want...
Statement 1: In oligopoly markets, the firms do NOT produce at the lowest possible cost (i.e.,...
Statement 1: In oligopoly markets, the firms do NOT produce at the lowest possible cost (i.e., lowest point on the average total cost (ATC) curve). Statement 2: Social surplus is NOT maximized in oligopoly markets. Statement (1) is true; statement (2) is false. Both statements (1) and (2) are tru. Both statements (1) and (2) are false. Statement (1) is false; statement (2) is true. Which of the following is the set of laws (legislation) that prohibits the formation of...
answer 14.1, extra detail for c depends on its ability to prevent buyers. pertectly competitive firms....
answer 14.1, extra detail for c
depends on its ability to prevent buyers. pertectly competitive firms. Durable goods s may be constrained by markets for used may opt for different levels of quality than olies (firms with diminishing avate naturs broad range of output levels). The mechanisms adopted can affect the regulated firm. . Governments often choose t average costs goods type A monopoly may be able to increase its profits further discrimination- that is, charging differ of buyers. The...
Show answers Consider a market in which there are 9 identical firms. Marginal cost of each...
Show answers Consider a market in which there are 9 identical firms. Marginal cost of each firm is given by MCi= 2qi, and there are no fixed costs. Market demand is given by Qd= 90- 3P. 27) Refer to Scenario 2. Assume perfect competition, so each firm is a price taker; then at market equilibrium, P= $______; Q= ______; and qi= ______. 28) Refer to Scenario 2. Assume perfect competition, ...; then at market equilibrium, each firm makes profits= $______;...
Please mathematically explain the meaning of the line "additional profit it would have earned by selling...
Please mathematically explain the meaning of the line "additional
profit it would have earned by selling Qc-Qm at price Pc" from the
above diagram.
Lost Consumer Surplus Deadweight Loss SS FROM MONOPOLY le and triangles show changes producer surplus when moving ice and quantity, P, and Q, to a d quantity, P, and Q Because of sumers lose A + B and producer dweight loss is B+ C AR Qe P, and Q, to the monopoly price and quantity, P...
two price-taking firms compete by setting quantities of output, then Select one: O a marginal revenue...
two price-taking firms compete by setting quantities of output, then Select one: O a marginal revenue is the same as the market price. b. social surplus will be maximized. O c. the market price will be climater than marginal cost. Od they will produce the same amount of output as in perfect competition. If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long run resource mobility, then...
The Prisoner's Dilemma utilizes game theory to explain behavior of firms in: Markets characterized by natural...
The Prisoner's Dilemma utilizes game theory to explain behavior of firms in: Markets characterized by natural monopoly. Monopoly markets. Perfectly competitive markets. Monopolistically competitive markets. Oligopoly markets At 500 units of output, total costs = $50,000 and total variable cost = $5,000. What does average fixed costs (ATC) equal at 500 units? $45,000 $50. $100. $90. Statement 1: Marginal cost pricing occurs when the market price of a good is equal to the marginal cost of the last unit of...
If a $5 tax on each pack of cigarettes causes the market price of cigarettes to...
If a $5 tax on each pack of cigarettes causes the market price of cigarettes to increase by $2.50 then which of the following statements is true? consumers must be more elastic than producers consumers must be less elastic than producers consumers and producers must be equally elastic Question 42 (1 point) If the elasticity of demand is -1.8 and the elasticity of supply is 1, then consumers are than producers and the relative consumer burden will equal . Hint:...
Which of the following statements correctly describes the relationship between the size of the deadweight loss...
Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium tax and finally to a large tax? The size of the deadweight loss increases, but the tax revenue first increases, then decreases. Both the size of the deadweight loss and tax revenue increase. The size of the deadweight loss increases, but the tax revenue...
Statement 1: For a monopoly firm, the marginal revenue curve is the same as the demand...
Statement 1: For a monopoly firm, the marginal revenue curve is the same as the demand curve for its product. Statement 2: A monopolist uses the same profit maximization rule that the perfectly competitive firm uses. Both statements (1) and (2) are false. Both statements (1) and (2) are true. Statement (1) is true; statement (2) is false. Statement (1) is false; statement (2) is true. Which of the following is TRUE of the model of perfect competition? There are...
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run...
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run equilibrium for each firm. b.entry and exit by firms are restricted. c. there are many firms in a single market. d. marginal revenue is equal to price for each firm. ECTION 22 Monopolistic competition differs from perfect competition because in monopolistically competitive markets a. all firms can eventually earn economic profits. b. each of the sellers offers a somewhat different product. C. strategic interactions...
Statement 1: In oligopoly markets, the firms do NOT produce at the lowest possible cost (i.e., lowest point on the average total cost (ATC) curve). Statement 2: Social surplus is NOT maximized in oligopoly markets. Statement (1) is true; statement (2) is false. Both statements (1) and (2) are tru. Both statements (1) and (2) are false. Statement (1) is false; statement (2) is true. Which of the following is the set of laws (legislation) that prohibits the formation of...
answer 14.1, extra detail for c
depends on its ability to prevent buyers. pertectly competitive firms. Durable goods s may be constrained by markets for used may opt for different levels of quality than olies (firms with diminishing avate naturs broad range of output levels). The mechanisms adopted can affect the regulated firm. . Governments often choose t average costs goods type A monopoly may be able to increase its profits further discrimination- that is, charging differ of buyers. The...
Please mathematically explain the meaning of the line "additional
profit it would have earned by selling Qc-Qm at price Pc" from the
above diagram.
Lost Consumer Surplus Deadweight Loss SS FROM MONOPOLY le and triangles show changes producer surplus when moving ice and quantity, P, and Q, to a d quantity, P, and Q Because of sumers lose A + B and producer dweight loss is B+ C AR Qe P, and Q, to the monopoly price and quantity, P...
two price-taking firms compete by setting quantities of output, then Select one: O a marginal revenue is the same as the market price. b. social surplus will be maximized. O c. the market price will be climater than marginal cost. Od they will produce the same amount of output as in perfect competition. If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long run resource mobility, then...
The Prisoner's Dilemma utilizes game theory to explain behavior of firms in: Markets characterized by natural monopoly. Monopoly markets. Perfectly competitive markets. Monopolistically competitive markets. Oligopoly markets At 500 units of output, total costs = $50,000 and total variable cost = $5,000. What does average fixed costs (ATC) equal at 500 units? $45,000 $50. $100. $90. Statement 1: Marginal cost pricing occurs when the market price of a good is equal to the marginal cost of the last unit of...
If a $5 tax on each pack of cigarettes causes the market price of cigarettes to increase by $2.50 then which of the following statements is true? consumers must be more elastic than producers consumers must be less elastic than producers consumers and producers must be equally elastic Question 42 (1 point) If the elasticity of demand is -1.8 and the elasticity of supply is 1, then consumers are than producers and the relative consumer burden will equal . Hint:...
Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium tax and finally to a large tax? The size of the deadweight loss increases, but the tax revenue first increases, then decreases. Both the size of the deadweight loss and tax revenue increase. The size of the deadweight loss increases, but the tax revenue...
Statement 1: For a monopoly firm, the marginal revenue curve is the same as the demand curve for its product. Statement 2: A monopolist uses the same profit maximization rule that the perfectly competitive firm uses. Both statements (1) and (2) are false. Both statements (1) and (2) are true. Statement (1) is true; statement (2) is false. Statement (1) is false; statement (2) is true. Which of the following is TRUE of the model of perfect competition? There are...
In perfect competition as well as in monopolistic competition, a. profit is positive in a long-run equilibrium for each firm. b.entry and exit by firms are restricted. c. there are many firms in a single market. d. marginal revenue is equal to price for each firm. ECTION 22 Monopolistic competition differs from perfect competition because in monopolistically competitive markets a. all firms can eventually earn economic profits. b. each of the sellers offers a somewhat different product. C. strategic interactions...
Most questions answered within 3 hours.
-
The DeVille Company reported pretax accounting
income on its income statement as follows:
2018
$
425,000...
asked 10 minutes ago -
Argue for or against the "Three Strikes"laws. Provide a rationale
to support your response.
asked 1 hour ago -
Bargaining Models: what is the "Obsolescing Bargain"?
Bargaining Models: what are the factors that would tend...
asked 2 hours ago -
1. A ball is thrown up into the air.
a) Draw motion diagram and the point-like...
asked 2 hours ago -
1) Because money eliminates the "double coincidence of wants"
problem, the development of money as a...
asked 2 hours ago -
Company AAA produces only one product which other manufacturers
purchase as a component for their final...
asked 5 hours ago -
An
item can be appended to an array-based list, provided the lenght is
less than the...
asked 5 hours ago -
Two particles each have a rest mass energy of 30 MeV and are
traveling with a...
asked 7 hours ago -
why
is vectorization a faster alternative to loops?
asked 8 hours ago -
General Matter’s outstanding bond issue has a coupon rate of
11.8%, and it sells at a...
asked 8 hours ago -
Write a one page essay on how important is it to know your basic
accounting knowledge...
asked 8 hours ago -
You are a Senior Civil Engineer posted at the Contracts and
Procurement Division of the Ministry...
asked 8 hours ago