Suppose a court rules that the ABC Corporation is in violation of the antitrust laws because it produces 70 percent of the output of its industry. This decision is consistent with the:

What is the great advantage of adjudication over legislation in the management of negative externalities?

A) Adjudication has lower costs. B) Adjudication maintains the continuity of expectations. C) Courts are bound by the rule of law and legislatures are not. D) Courts can act more quickly than legislatures. E) There are no clear answers in such cases.

Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and a fungal disease destroys a large portion of the grape harvest of California vineyards

In the market for red wine, these two developments would A) increase demand and decrease supply resulting in a decrease in both the equilibrium quantity and the equilibrium price of red wine. B) increase demand and increase supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of red wine. C) increase demand and decrease supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of red wine. D) increase demand and decrease supply, resulting in an increase in the equilibrium price and an uncertain effect on the equilibrium quantity of red wine.