The United States does not use subsidies as part of its policies
Indicate whether the statement is true or false
FALSE
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If the United States imposes a tariff on foreign chocolate, how are U.S. buyers of chocolate affected?
A) Their demand for chocolate increases because the U.S. production chocolate increases. B) The price they pay for chocolate falls, but they consume less chocolate because less is imported. C) The quantity they consume is unchanged. D) The price they pay for chocolate falls, and they consume more chocolate. E) The price they pay for chocolate rises.
Market power is illegal
A) True, no one is allowed to charge a price greater than marginal cost. B) False. C) True, no one is allowed to charge a price greater than average cost. D) False, because market power guarantees price equal to average cost.