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Answers to Second Midterm
... I. If the market for electricity in Gotham is a natural monopoly than this market can provide electricity at lower cost per unit if there are at least two providers of electricity that compete with one another. II. If the market for electricity in Gotham is a natural monopoly than Utility, Inc.’s av ...
... I. If the market for electricity in Gotham is a natural monopoly than this market can provide electricity at lower cost per unit if there are at least two providers of electricity that compete with one another. II. If the market for electricity in Gotham is a natural monopoly than Utility, Inc.’s av ...
Econ 101, section 5, S01
... average total cost is $4/unit. To maximize profit (or minimize loss) in the short run, the firm should a. maintain its current output. b. increase output. *. decrease output, but not shut down. d. impossible to determine without more information. 12. Under which of the following circumstances would ...
... average total cost is $4/unit. To maximize profit (or minimize loss) in the short run, the firm should a. maintain its current output. b. increase output. *. decrease output, but not shut down. d. impossible to determine without more information. 12. Under which of the following circumstances would ...
Test answers - December 2001
... MC = 3q + 4. The monopolist will produce where MR = MC, therefore, 29 – 2q = 3q + 4, or q* = 5. The correct answer is (F). 31. Substituting q = 5 into the demand curve, the equilibrium price will be P* = 29 - 5 = $24. The correct answer is (Q). 32. Demand is P = 24 - q. Marginal revenue is MR = 24 – ...
... MC = 3q + 4. The monopolist will produce where MR = MC, therefore, 29 – 2q = 3q + 4, or q* = 5. The correct answer is (F). 31. Substituting q = 5 into the demand curve, the equilibrium price will be P* = 29 - 5 = $24. The correct answer is (Q). 32. Demand is P = 24 - q. Marginal revenue is MR = 24 – ...
Long-run average cost
... some value of the variable input further increases in the variable input lead to steadily decreasing marginal product of that input. • For example, trying to increase labour input without also increasing capital will bring diminishing marginal returns. ...
... some value of the variable input further increases in the variable input lead to steadily decreasing marginal product of that input. • For example, trying to increase labour input without also increasing capital will bring diminishing marginal returns. ...
Microeconomics topic 2
... – countries specialising eg coffee Regional – different areas of one country eg farming Industry eg whisky Firm eg whisky distilling, bottling ...
... – countries specialising eg coffee Regional – different areas of one country eg farming Industry eg whisky Firm eg whisky distilling, bottling ...
ECON 500 –Microeconomic Analysis and Policy Producer Theory
... II - The supply curve is shifted to the left by increases in the wage rate, III - The supply curve is shifted outward by increases in capital input IV - The rental rate of capital, v, is irrelevant to short-run supply decisions ...
... II - The supply curve is shifted to the left by increases in the wage rate, III - The supply curve is shifted outward by increases in capital input IV - The rental rate of capital, v, is irrelevant to short-run supply decisions ...
Foundations of Economics, 3e (Bade/Parkin)
... Answer: Let us consider the value of the marginal product of two workers, Alex Rodriquez, shortstop for the New York Yankees, and any kindergarten teacher in the United States. The value of marginal product of labor is the marginal product of labor multiplied by the price of the output the laborer p ...
... Answer: Let us consider the value of the marginal product of two workers, Alex Rodriquez, shortstop for the New York Yankees, and any kindergarten teacher in the United States. The value of marginal product of labor is the marginal product of labor multiplied by the price of the output the laborer p ...
Chapter 24 Perfect Competition Exam V2
... Suppose the perfectly competitive equilibrium occurs such that too many of the good are produced. This is an example of marginal cost pricing. market failure. firms being unable to exit the industry. greedy business people behaving in an inappropriate manner. ...
... Suppose the perfectly competitive equilibrium occurs such that too many of the good are produced. This is an example of marginal cost pricing. market failure. firms being unable to exit the industry. greedy business people behaving in an inappropriate manner. ...
COMPETITION, CONSUMER WELFARE, AND THE SOCIAL COST
... any prominent monopolist firm that has a sole owner or a sole shareholder. Instead, most monopolist firms have multiple shareholders; and in many cases, these firms’ shares are widely held. Investment and cost decisions of a firm are ultimately made by the managers of the firm who receive salaries a ...
... any prominent monopolist firm that has a sole owner or a sole shareholder. Instead, most monopolist firms have multiple shareholders; and in many cases, these firms’ shares are widely held. Investment and cost decisions of a firm are ultimately made by the managers of the firm who receive salaries a ...
Study Questions
... 2a. False. A monopolist faces a downward-slopping demand curve. Hence, an increase in price means a drop in quantity sold. 2b. False. If the short-run AC curve lies everywhere above the demand curve, then the monopolist will incur losses. (NOTE: If the AC curve lies everywhere above the demand curv ...
... 2a. False. A monopolist faces a downward-slopping demand curve. Hence, an increase in price means a drop in quantity sold. 2b. False. If the short-run AC curve lies everywhere above the demand curve, then the monopolist will incur losses. (NOTE: If the AC curve lies everywhere above the demand curv ...
Sources of Shift in Demand Curves
... In equilibrium, there are no forces or reasons for change. • A marble in a bowl is in stable equilibrium. • It remains at the bottom if there are no external changes to the system. ...
... In equilibrium, there are no forces or reasons for change. • A marble in a bowl is in stable equilibrium. • It remains at the bottom if there are no external changes to the system. ...