Which of the following is true under monopoly?
a. Price is equal to marginal revenue.
b. Price is equal to marginal cost.
c. Price is less than marginal revenue.
d. Price is less than marginal cost.
e. Price is greater than marginal revenue.
e
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Which of the following is NOT an operating instrument?
A) nonborrowed reserves B) monetary base C) federal funds interest rate D) discount rate
Exhibit 14-1 Private and social cost
The perfectly competitive profit-maximizing firm in Exhibit 14-1 creates water and air pollution as a consequence of producing its output of pigs. If pollution costs are borne by third parties, the firm will maximize economic profit by choosing to:
A. voluntarily incur costs to reduce its pollution. B. produce at output rate Q3. C. produce at output rate Q2. D. produce at output rate Q4.