Three individuals have $1000 and identical preferences for gum, g, and cigarettes, s, as measured by the utility function U(g,s) = 10g0.9s0.1. The price of gum is $9 and the price of cigarettes is $12. What is the market surplus/shortage at a price of $12 when the supply of cigarettes is 5?
A) There will be a shortage of 3 cigarettes.
B) There will be a surplus of 3 cigarettes.
C) There will be a shortage of 2/3 cigarettes.
D) There will be a surplus of 2/3 cigarettes.
A
Economics
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The above figure shows the demand and cost curves facing a monopoly. Maximum profit equals
A) $0. B) $100. C) $1,000. D) $2,500.
Economics
Economies of scale and Increasing Returns to Scale are the same thing looked at from either the production or cost perspective
Indicate whether the statement is true or false
Economics