Dominant strategies are often difficult to take because a better alternative could exist

Refer to Figure 16-5. Consider the following two pricing strategies:

a. a fixed fee and a per-unit price equal to the monopoly price b. a fixed fee and a per-unit price equal to the competitive price The firm represented in the diagram earns a higher profit under strategy ________ and deadweight loss is eliminated under ________. A) a; b B) b; b C) a; neither strategy D) b; neither strategy

Suppose your firm operates in a perfectly competitive market and decides to double its output. How does this affect the firm's marginal profit?

A) Marginal revenue and marginal cost increase B) Marginal revenue increases but marginal cost remains the same C) Marginal cost may change but marginal revenue remains the same D) Marginal revenue and marginal cost decrease