How do exports affect buyers' consumer surplus?
What will be an ideal response?
Consumer surplus decreases. It decreases because exports raise the price of the good being exported, so buyers purchase less of the good and hence their consumer surplus decreases.
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The monopolist's marginal revenue curve is downward sloping because:
a. the monopolist must lower its price in order to sell more. b. it operates in the range where ATC is downward sloping. c. it operates in the range where MC is downward sloping. d. its total revenue declines as it sells more.
If price discrimination occurs in a market
A) consumers whose demand for the product sold is more elastic pay higher prices than consumers whose demand is less elastic. B) the firm earns arbitrage profits. C) the marginal cost of production is constant. D) the law of one price does not hold.