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Question 22 On the chart below the environment case for the Jones company can be observed. The dotted line demonstrates a broad gap between investment (M) in reducing pollution and the benefit gained (MB) by the investment. What scenario does this illustrate, as it relates to the marginal cost of reducing pollution? MC MB Environmental Protection Extensive Pollution Select the correct answer below: A broad separation between marginal cost and marginal benefit curves indicates that there are ways to reduce pollution available. Meaning the marginal benefits of doing so is high. So, allocating resources to fight pollution is wise. cheap and easy Because the gap between marginal benefits and marginal costs in narrowing, at this point it may become more important to use market-oriented environmental tools to hold down the costs of reducing pollution. O At this point, the marginal costs exceed the marginal benefits, which means society is not allocating resources efficiently because it is forfeiting too many resources to reduce pollution. O Reducing pollution is always good for the earth, and should always be done. Price Question 27 Which of the following companies is most likely a monopoly? Select the correct answer below: company A lowers its price in order to capture a larger share of the market company B was awarded a patent on its product no other company produces the exact same product as company C, although many close substitutes exist company D has to take the market price as a given Question 35 Suppose that a member firm in an oligopoly cartel is supposed to produce a quantity of 8,000 and sell at a price of $250. The other members of the cartel encourage this firm to honor its commitments by acting so that the firm faces a kinked demand curve. If the oligopolist attempts to expand output and reduce price slightly, what will other member firms do in response? Select the correct answer below: raise prices immediately to increase their profit share cut prices immediately to discipline the oligopolist that defected on the cartel agreement keep prices the same so that nothing in the market changes report the oligopolist to the authorities for collusion

Answer 1

22) Option A is correct . As benefits from environment protection tools are greater than the cost , it clearly implies that there are other cheap and easy ways to reduce pollution .

27) Option B is correct . Monopoly is a kind of firm producing a product which has no close substitutes in the market and set their own price . They lower price to sell more of a good .

35) option B is correct because their exist cut throat competition among firms in case of oligopoly so if one cuts down the prices other firm firm will also lower their price