The deadweight loss from a tax of $x per unit will be smallest in a market
a. in which demand is elastic and supply is inelastic.
b. in which demand is inelastic and supply is elastic.
c. in which demand is inelastic and supply is inelastic.
d. None of the above are correct; we need to know the value of x in order to determine the answer.
c
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What is the relationship between the bowed out shape of the production possibilities frontier and the increasing opportunity cost of a good as more of it is produced?
What will be an ideal response?
Both monopolistically competitive firms and perfectly competitive firms maximize profits
A) by producing where price equals average total cost. B) by producing where price equals average variable cost. C) by producing where marginal revenue equals marginal cost. D) by producing where marginal revenue equals average revenue.