Suppose a firm has market power and faces a downward sloping demand curve for its product, and its marginal cost curve is upward sloping. If the firm reduces its price, then:
A) consumer and producer surplus must increase.
B) consumer surplus increases, producer surplus may increase or decrease.
C) consumer surplus increases, producer surplus must decline.
D) consumer and producer surplus must decline.
B
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When U.S. official reserves ________, the official settlements account balance becomes negative and when U.S. official reserves ________, the official settlements account balance becomes positive
A) increase; decrease B) decrease; increase C) increase; increase D) decrease; decrease E) More information is needed about the balances on the current account and the capital account in order to answer this question.
Which of the following statements is true?
A) If the domestic price of a good in a country is lower than the world price, the country will become an exporter of the good. B) Whether a country becomes an importer or an exporter of a good depends only on the domestic price of the good and is independent of the world price of the good. C) If the domestic price of a good in a country is lower than the world price, the country will become an importer of the good. D) Whether a country becomes an importer or an exporter of a good depends only on the world price of the good and is independent of the domestic price of the good.