An economic model is a
A) realistic version of an economic environment.
B) fictional representation of an entire economy.
C) detailed version of an economic issue.
D) simplified representation of an economic environment.
D
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Which of the following is TRUE about a firm in monopolistic competition in the long run?
A) P = MC B) P = MR C) ATC = MC D) P = ATC E) MC = ATC
Suppose a monopoly sells to two identifiably different types of customers, A and B, who are unable to practice arbitrage. The inverse demand curve for group A is PA = 10 - QA, and the inverse demand curve for group B is PB = 18 - QB
The monopolist is able to produce the good for either type of customer at a constant marginal cost of 2, and the monopolist has no fixed costs. If the monopolist practices group price discrimination, the profit maximizing prices charged to each type of customer are A) PA = 6, and PB = 10. B) PA = 4 and PB = 8. C) PA = 10, and PB = 6. D) PA = 8, and PB = 4.