The socially optimal price (P = MC) is socially optimal because: a. It reduces the monopolists profit.

Question:

The socially optimal price (P = MC) is socially optimal because:

a. It reduces the monopolist’s profit.

b. It yields a normal profit.

c. It minimizes ATC.

d. It achieves allocative efficiency.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomics Principles, Problems and Policies

ISBN: 978-1259450242

20th edition

Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn

See More Books

Question Posted: Apr 24, 2018 05:34 AM

See More Questions

Suppose you have been tasked with regulating a single monopoly firm that sells 50pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $1 per bag no matter...
The diagram below shows the demand, marginal cost, and marginal revenue curves for a monopolist. Redraw the diagram for yourself to be able to answer the following questions. a. If the monopolist...
Review the concept of externalities from Chapter 5, page 148. If a market is a monopoly, will a negative externality in production always lead to production beyond the level of economic efficiency?...
Given are five observations for two variables, x and y. a. Develop a scatter diagram for these data. b. What does the scatter diagram developed in part (a) indicate about the relationship between the...
Is the purchase of a state lottery ticket rational?
What does the square-root effect suggest about the relationship between sales and advertising?
On 31 December 1992, the passbook of Mr. Menon's Current A/c showed a credit balance of 10,000. Prepare a Bank Reconciliation Statement with the following information: (a) Mr. Menon issued a cheque...
The following events apply to R&L Logging Company for the 2010 fiscal year. 1. The company started when it acquired $80,000 cash from the issue of common stock. 2. Purchased a new skidder that cost...
The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the companys products is increasing, and management requests assistance from you in determining an economical sales...
Campus Theater adjusts its accounts every month. Below is the companys unadjusted trial balance dated August 31, 2011? Additional information is provided for use in preparing the companys adjusting...
Suppose that a monopolist can segregate his buyers into two different groups to which he can charge two different prices. In order to maximize profit, the monopolist should charge a higher price to...
The main problem with imposing the socially optimal price (P = MC) on a monopoly is that the socially optimal price: a. May be so low that the regulated monopoly cant break even. b. May cause the...
(a) If f(x) = 4x tan x, /2 < x < /2, find f' and f". (b) Check to see that your answers to part (a) are reasonable by comparing the graphs of f , f', and f".
Among 450 randomly selected drivers in the 16 - 18 age bracket, 374 were in a car crash in the last year. If a driver in that age bracket is randomly selected, what is the approximate probability...
Construct a 90% confidence interval for the population standard deviation o at Bank A. Bank A 6.4 6.6 6.7 6.8 7.1 7.2 7.6 7.8 7.8 7.8
In 2002, after the accounting deceptions of the management of many multi-million dollar corporations (with Enron being the benchmark name of that time period), the Security and Exchange Commission...
1.Deduce the structure of a compound with molecular formula CsH100 that exhibits the following IR, H NMR, and 13C NMR spectra. Data from the mass spectrum are also provided. Mass Spec. Data relative...
Transcribed image text: Prots Caco.ch Part 2 Income Statement Med Earningstemet Tante Sheet For the event.com Competence ended The fram C an an dy wana A TO nede ANG ore.com wwwwww og for to...
The population of California was about 37 million in 2010 and increasing by 1.0% each year. Estimate the population of California in 2020.
Four GWU students have been selected to taste food sold by 3 different food trucks labeled as food truck A, B and C on H & 22nd Streets every Monday for 3-weeks. For each student, food trucks are...
Jos Marias utility function is U(B, Z) = AB Z . What is his marginal utility of B? What is his marginal utility of Z? What is his marginal rate of substitution between B and Z?
Diogo has a utility function U(B, Z) = AB Z , where A, , and are constants, B is burritos, and Z is pizzas. If the price of burritos, p B , is $2 and the price of pizzas, p Z , is $1, and Y is...
Felix chooses between water and all other goods. If he spends all his money on water, he can buy 12 thousand gallons per week. At current prices, his optimal bundle is e 1 . Show e 1 in a diagram....
you are analyzing the cost of debt for a firm. Do you know that the firms 14 year maturity, 7.8 Percent coupon bonds are selling at a price of $834. The Barnes pay interest semi annually. If these...
***Please answer the following using excel and showcasing the formulas/calculations used*** thank you so much Financial information on AAA Ltd. is shown below. AAA Ltd. Income Statement For the Year...
2. In an account Anh Paglinawan currently has $216,670.00. At a rate of 8.00% how long will it take for them to have $298,390.00 assuming semi-annually compounding? (Hint: compute the exact years, do...

The socially optimal price (P = MC) is socially optimal because: a. It reduces the monopolists profit.

Question:

Step by Step Answer:

It achieves allocative efficiency The socially optimal price is socia...View the full answer

Microeconomics Principles, Problems and Policies

Students also viewed these Business questions