Suppose a monopoly's inverse demand curve is P = 100 -Q, it produces a product with a constant marginal cost of 20, and it has no fixed costs. How much more or less is the deadweight loss if the monopoly can practice perfect price discrimination compared to it practicing uniform pricing?
A) The deadweight loss is smaller by 800.
B) The deadweight loss is greater by 800.
C) The deadweight loss is smaller by 1600.
D) The deadweight loss is greater by 1600.
A
Economics
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When a new firm enters a monopolistically competitive market, the individual demand curves faced by all existing firms in that market will
a. shift to the left. b. shift to the right. c. shift in a direction that is unpredictable without further information. d. remain unchanged. It is the supply curve that will shift.
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If the money supply in the economy were at MS3, to engage in expansionary policy the Federal Reserve Bank would use open market operation to move money supply to:
A. MS2 B. MS1 C. it would stay at MS3 D. MS4
Economics