Asymmetric information refers to differences in information possessed by parties engaged in trade
Indicate whether the statement is true or false
T
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A monopoly misallocates resources when it
A) restricts output so that the marginal benefit of the last unit sold exceeds the marginal social cost of producing the good. B) makes an above-normal profit. C) sells the same product to different groups of customers at different prices. D) exploits scale economies.
The demand for microwaves in a certain country is given by: D = 8,000-30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, the domestic quantity demanded will be ________ and quantity supplied will be ________.
A. 6,500; 3,000 B. 5,000; 5,000 C. 6,000; 4,000 D. 6,500; 4,500