The Coase theorem proves that externalities will be neutralized by bargaining
Indicate whether the statement is true or false
F The Coase theorem shows that incentives exist for bargaining to an improved, more efficient equilibrium, but transaction costs may readily prevent the achievement of that outcome.
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Suppose Veronica sells teapots in the perfectly competitive teapot market. Her output per day and her costs are as follows:
Output per Day Total Cost 0 $20 1 32 2 37 3 48 4 61 5 75 6 92 7 113 8 136 Suppose the current equilibrium price in the teapot market is $10. To maximize profit, how many teapots will Veronica produce, what price will she charge, and how much profit (or loss) will she make? Draw a graph to illustrate your answer. Your graph should include Veronica's demand, ATC, AVC, MC, and MR curves, the price she is charging, the quantity she is producing, and the area representing her profit (or loss).
A monopsonist faces an upward-sloping labor supply curve. This means that his marginal expenditures on labor are
A) greater than the wage. B) equal to the wage plus the increase in the wage resulting from hiring one more unit of labor hired. C) greater than the wage because hiring more workers requires to pay all workers more. D) All of the above.