21. Holding supply conditions constant, the costs of regulation fall wholly on producers when:

a.

E_P = 1

b.

E_P => 1

c.

E_P =

d.

E_P = 0

22.A 100% markup on cost is equivalent to a markup on price of:

a.

25%

b.

33%

c.

50%

d.

100%

23.A 25% markup on price is equivalent to a markup on cost of:

a.

25%

b.

33%

c.

50%

d.

100%

24.When E_P = -3, the optimal markup on cost is:

a.

100%

b.

67%

c.

50%

d.

33%

25.When E_P = -2, the optimal markup on price is:

a.

100%

b.

67%

c.

50%

d.

33%

Use the following table to answer the next question

Quantity

of output

Total

cost

0

$50

10

85

20

150

30

220

40

305

50

455

26.If the market price is $8.50, what are the profit-maximizing output and profit?

a.

output = 40; profit = $35

b.

output = 40; profit = $0

c.

output = 0; profit = -$50

d.

output and profit cannot be determined because marginal revenue cannot be calculated

27.If a firm charges a price of $6 for a product with a cost of $5, the markup on cost equals:

a.

67%

b.

33%

c.

20%

d.

50%

28.If a firm charges a price of $5 for a product with a cost of $3, the markup on price equals:

a.

60%

b.

150%

c.

250%

d.

40%

29.If the optimal markup on price is 50%, the optimal markup on cost is:

a.

100%

b.

75%

c.

50%

d.

25%

30.If the optimal markup on cost is 25%, the optimal markup on price is:

a.

20%

b.

25%

c.

50%

d.

100%