The profit-maximizing output of a monopolistic competitor is determined at the point of intersection of the demand curve and the marginal cost curve
a. True
b. False
Indicate whether the statement is true or false
False
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The above figure shows the demand and supply curves in the market for milk. If the government imposes a quota at 500 gallons, calculate the deadweight loss
What will be an ideal response?
Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a $2,000 rebate on new truck sales, what can Ford expect to see?
a. an unprecedented increase in truck sales b. an immediate response by GM and Dodge c. a visit from the antitrust authorities of the government d. a revolution from Ford stockholders e. announcements by GM and Dodge that plans are underway to produce a much cheaper pick-up truck in six years