An expenditure maximizing multi-product firm will set the same relative prices as a welfare maximizing firm
Indicate whether the statement is true or false
F The expenditure maximizing firm will make full use of demand elasticity differences across its services, whereas the welfare maximizing firm will effectively increase all elasticities so they have less effect on price markups.
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A country is more likely to have net welfare gains when it imposes a tariff on a foreign monopolist if:
a. the tariff is small. b. the tariff is large. c. the tariff revenues are large. d. the deadweight losses are large.
Steve buys Pepsi at $.60 per can and orange juice at $1.20 per can. In consumer equilibrium,
a. orange juice would yield a higher marginal utility per dollar spent than Pepsi would b. he will consume twice as much Pepsi as orange juice c. he will consume more orange juice than Pepsi d. total utility from orange juice is twice that from Pepsi e. his last can of orange juice would generate a higher marginal utility than his last can of Pepsi