It is true in monopoly pricing that the
a. sky is not the limit.
b. market cannot impose a price on a monopolist.
c. monopolist is a price maker.
d. All of the above are correct.
d
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Refer to Figure 5-4. Why is there a deadweight loss?
A) because the marginal social cost of producing each additional unit in excess of Q2 exceeds the marginal benefit B) because the marginal social benefit of producing each additional unit in excess of Q2 exceeds the private cost C) because the marginal private cost of producing each additional unit in excess of Q2 exceeds the marginal benefit D) because the marginal private benefit of producing each additional unit in excess of Q2 exceeds the social cost
Suppose that the value of the short-run absolute elasticity of demand for a good is 0.4. Then, we know the long-run absolute price elasticity of demand will be
A) 0. B) greater than 0.4. C) elastic. D) less than 0.4.