Refer to the cost and demand data below for a pure monopolist. Suppose that this monopoly is subjected to a regulatory commission. If the commission seeks to achieve the most efficient allocation of resources for this industry, it should set the socially optimal price at:

A person's sensitivity to a price change for a good, such as breakfast cereal, depends on all of the following except the

a. price of the good b. cost of producing the good c. person's income d. availability and closeness of substitutes e. time the person has to adjust to the price change

Fiscal policy refers to the:

A. deliberate changes in government spending and taxes to stabilize domestic output, employment, and the price level. B. deliberate changes in government spending and taxes to achieve greater equality in the distribution of income. C. altering of the interest rate to change aggregate demand. D. fact that equal increases in government spending and taxation will be contractionary.