Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 30,000 units
A) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently high.
B) producers should raise the price to $3 in order to sell the quantity demanded of 30,000.
C) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low.
A
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The principle involved in short-run uncovered interest parity is that home interest rates will be equal to:
A) the world equilibrium real rate of interest. B) the foreign interest rate minus foreign inflation. C) the foreign rate of interest plus the expected rate of depreciation of the home currency. D) the domestic nominal rate of interest plus domestic inflation.
When a monopoly is regulated it is required to sell lower output at a lower price
a. True b. False Indicate whether the statement is true or false