A monopolist faces the inverse demand curve P = 60 - Q. It has variable costs of Q2 so that its marginal costs are 2Q, and it has fixed costs of 30. The monopoly's profit-maximizing output is

Assume there is a shortage in the market for digital music players. Which of the following statements correctly describes this situation?

A) The shortage will cause a decrease in the equilibrium price of digital music players. B) The demand for digital music players is greater than the supply of digital music players. C) Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price. D) The price of digital music players will rise in response to the shortage; as the price rises the quantity demanded will increase and the quantity supplied will decrease.

Prior to the 1996 Summer Olympics in Atlanta, Georgia, the city passed legislation that effectively prevented hotels from increasing their rates during the games. Describe the effects of this legislation on the market for hotel rooms during the games