The output level produced by a profit-maximizing monopolist:
a. exceeds the level that would maximize social welfare.
b. is allocatively efficient.
c. is less than the level that would maximize social welfare.
d. always results in economic profits in the long run.
c
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The demand curve in the figure above illustrates a product whose demand has a price elasticity of demand equal to
A) zero at all prices. B) infinity. C) one at all prices. D) a different amount at different prices.
If the Herfindahl-Hirschman index (HHI) among the firms in the long distance telecommunications market were equal to 1755, when would the Federal Trade Commission probably challenge a proposed merger between any two of the firms?
A) It would challenge if the HHI would increase by more than 50 points. B) It would challenge if the HHI would increase by more than 100 points. C) It would challenge no matter what happened to the HHI because the market has so few firms. D) It would not challenge because the HHI is less than 1800.