An important similarity between a monopolistically competitive firm and a pure monopolist is that both:
A. realize an economic profit in the long run.
B. achieve allocative efficiency.
C. face demand curves that are less than perfectly elastic.
D. achieve productive efficiency.
Answer: C
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Once the national health care program goes into effect, we can expect
A) total expenditures on health care will decrease. B) more individuals will have more incentives to make decisions that promote better health. C) total expenditures on health care will increase. D) moral hazard will decrease.
Refer to Scenario 19.3 below to answer the question(s) that follow. SCENARIO 19.3: Suppose demand for widgets is given by the equation P = 20 - 0.5Q. Originally, the price of the good is $10 per unit. When a tax of $2 per unit is imposed, the price of the good rises to $12 per unit.Refer to Scenario 19.3. Prior to the imposition of the tax consumer surplus was ________ and after the tax was imposed consumer surplus was ________.
A. $100; $64 B. $64; $100 C. $200; $128 D. $50; $32