The Lucas supply function incorporates the idea that output depends on the difference between the actual price level and the expected price level.

The above table shows the market shares for all the landscaping services in a suburban area. A merger between firms E and F would

A) raise the four-firm concentration ratio. B) have no effect on the four-firm concentration ratio. C) lower the four-firm concentration ratio. D) create a monopoly.

Refer to Scenario 10.3. Suppose that a tax of $5 per unit of output is imposed on red herring producers. The price of red herring will

A) not change. B) increase by less than $5. C) increase by $5. D) increase by more than $5. E) decrease.