A monopoly might produce less than the socially optimal amount of pollution because
A) it likes to be a good citizen.
B) it sets price above marginal cost.
C) it earns economic profit.
D) it internalizes the external costs.
B
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If the MPS is 0.1 and the income tax rate is 0.33, and the fraction of income spent on imports is 0.25, then the multiplier is
A) 2.5. B) 1.47. C) 1.51. D) 1.55.
If a monopolist is producing at the profit-maximizing level of output, what price will it charge?
a. The price given by the marginal-revenue curve at that level of output. b. The price given by the marginal-cost curve at that level of output. c. The price given by the average-cost curve at that level of output. d. The price given by the average-revenue curve at that level of output. e. The price given by the total revenue curve at that level of output.