Assume the market was in equilibrium in the graph shown. If the market price gets set to $14, which of the following is true?
A. Some consumers gain surplus, but total surplus falls.
B. Some producers gain surplus, but total surplus falls.
C. Some producers lose surplus, but total surplus rises.
D. Some consumers lose surplus, but total surplus rises.
B. Some producers gain surplus, but total surplus falls.
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In the short run, international trade allows a monopolistically competitive firm an opportunity:
a. to produce more output. b. to earn monopoly profits. c. to reduce its average costs. d. to produce more output, earn monopoly profits, and reduce its average costs.
Hostess Brands is selling off its assets after liquidation. A potential buyer for the Twinkies brand has found that the total revenue will be $3 billion a year if the brand is managed well and $1 billion a year if the brand is managed poorly
There is .6 (or 60 percent) chance of managing the brand well and a .4 (or 40 percent) chance of managing the brand poorly. What is the expected total revenue? A) $0.4 billion B) $1.2 billion C) $1.8 billion D) $2.2 billion