In which situation would a monopolist be maximizing profit when it produces at an output where MC < MR?
a. none because when MC < MR, profit is not maximized
b. when the barriers of entry are overcome so that other firms enter
c. when costs keep falling as output increases
d. when price increases as output increases
e. when economic profit is greater than normal profit
A
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Public goods are characterized by: a. rivalry in consumption
b. nonrivalry in consumption. c. excludability of nonpayers. d. none of the above
Mankiw argues that a primary difference between taxing products like gasoline and taxing soda and other sugary drinks is that
a. consumption of gasoline causes negative externalities on society while consumption of soda affects the consumer. b. the government can generate significant revenue from the gas tax but not from a soda tax. c. gasoline has inelastic demand but soda has elastic demand. d. Both a and c are correct.