Show that if a firm is a natural monopoly, a government policy that forces marginal cost pricing will result in losses for the firm.

Q: Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the fi...

A: Perfect competition is the market structure where there are large no of buyers and sellers selling h...

Q: If a corporation decides to issue their shares of stocks to the public for the first time, which of ...

A: Shares refer to the ownership of the company. If a company buys shares of a particular company then ...

Q: Can you please explain step by step Practice problem #2 Tania has utility U = 20/Cī + c2 & income m1...

A: Above questions pertains to intertemporal choice problem in which a consumer optimizes its output be...

Q: 10. Mobility of labour A. O Increases efficiency of labour B. O Spoils labour C. O Increases divisio...

A: "Correct option is D."

Q: 2. Suppose demand and supply are given by Qd, = 7-, and Qs =P- a. Determine the equilibrium price an...

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for yo...

Q: Afake economy has a trade deficit of 500. imports of 800 and national savings of 2000, Investment in...

A: Given information are  Trade deficit =500 Imports M=800 and National saving S=2000

Q: Consider the market for coffee: Assume first that there is a heatwave that damages a large portion ...

A: The introduction to the question rightly mentions that "a market consists of groups of buyers and se...

Q: Note : please answer both the question. I will give instant upvote.   For the​ "No, markets fail​ ...

A: Answer:  (1). A negative demand shock leads to a decrease in the aggregate demand in the economy. As...

Q: What do you call the Circular flow of goods and income of households and firms with the government a...

A: The Circular Flow of goods and income of households and firms with the government and foreign countr...

Q: The first costs of an equipment is P 65,000 and a salvage value of P 3,000 at the end of its 6- year...

A: Given Cost of equipment = 65000 P salvage value = 3000 P Time= 6 years Depreciation Method = sum of ...

Q: Draw the graph for the firm (include ATV, AVC, MC, and MR curves) 2. At this output of Q = 100, cal...

A: A perfectly competitive firm is a price taker and can sell any quantity of the commodity at the mark...

Q: profit? MC Y00 ATC 300 D-MR 200 leo 20 30

A: here we calculate the firms profit by the following method as follow;

Q: Which of the following is NOT TRUE about Financial Intermediaries? * A. Financial Intermediaries are...

A: Financial markets (such as those in which stocks or bonds are traded), securities (from bank CDs to ...

Q: In January 2019, the Egg Marketing Board announced that the egg quota would be reduced by 10% for al...

A: 10% is quota reduced for all the producers, it would create the less supply in the market or if the ...

Q: Suppose that the University of Alabama and Clemson are making spending decisions for theupcoming yea...

A:   Meaning of Decision Theory under Nash Equilibrium: The term decision theory refers to the situatio...

Q: The Prime Minister claims that funding the increase in NHS and social care spending by national insu...

A: We show the Màrket bàlance can be defined as a market situation in which the availability of goods a...

Q: Ben wishes his son to receive P 200,000 ten years from now. What amount should he invest now if it w...

A: Answer:  Ben needs to deposit P68757.82

Q: 4. As of July 2015, the unemployment rate in the United States was 5.5 percent. What would economist...

A: Answer: Unemployment rate: it refers to the ratio of unemployed to the labor force. The unemployment...

Q: Number of Output of Fixed Variable Average Marginal Total Average Margina Average Average Workers (V...

A: The total product directs to the entire portion of the outcome produced within a provided quantity o...

Q: National income is equal to Multiple Choice rent + transfer payments + interest + wages

A: National income is the sum of factor income earned by the residents of the country over the given pe...

Q: are some government strategies u ase exports?

A: Outflow of goods and services from one country to another is known as export. 

Q: Table 1.1: Total expenditure in Thalland, by category, 2014 Category of Spending us dollars (bilone)...

A: According to the above mentioned question, the values we have are:- Government consumption = 69 Valu...

Q: PROBLEM IV. Consider an industry consisting of two firms (i = 1,2) that are engaged in a Bertrand pr...

A: Let's first learn that what is actually collusive pricing. It is said to be a scenario when few comp...

Q: What are four non-price determinants of demand that are assumed constant, and that when changed, cau...

A: Law of Demand states that there exists inverse relationship between price and quantity demanded of g...

Q: Investors may view the euro area with suspicion because one of its member's public debt increases dr...

A: The outflow or the inflow of a currency depends upon its relative strength in the international mark...

Q: If company A has production function f(k)=3k1/3; company B has f(k)=6k1/2; suppose new machines can ...

A: Steady state condition is achieved at the point where the investment equals capital requirement at t...

Q: Which of the following are statements illustrate opportunity cost? Select ONLY THOSE THAT APPLY. Sel...

A: "Opportunity cost refers to what is sacrificed when the other thing is chosen over another."

Q: Which of the following statements is TRUE?     The marginal product and average product curves in...

A: The Marginal Product (MP) refers to the addition made to Total product at each level of output. The ...

Q: Year Price of Tea Qty of Tea Price of Shoes Qty Shoes 2018 Php10 200 Php100 50 2019 Php11 200 Php110...

A: Here, it is given that the base year is 2018, and quantity of tea and coffee are same in both the ye...

Q: Price £/unit E D3 D1 D2 Quantity Figure 4 Supply and demand curves for a normal good Figure 4 shows ...

A: A major natural disaster disrupts the production of goods leads to a decrease in the supply of goods...

Q: Plot the above AD-AS curves on the (Y, T) diagram. Describe the slopes of both the AD curve and the ...

A: Economists generally agree that the rate of money growth is one determinant of an economy's inflatio...

Q: 1998, five companies were found guilty because of their actions to raise the price of an animal feed...

A: Elasticity of demand is the ratio of %change in Qd(quantity demanded) and %change in P(price) of the...

Q: 1. The following model is a simplified version of the multiple regression model used by Biddle and H...

A:

Q: 5. How can the high rate of return available in modern financial markets discourage businesses from ...

A: Introduction The hazard-go back tradeoff is a buying and selling law that combines extreme risk with...

Q: For an imaginary economy, when the real interest rate is 7 percent, the quantity of loanable funds d...

A:

Q: In a simple model without government spending or taxation, if C = a +bY where C is consumer spending...

A: Consumption Function is the function relationship between the spending of the consumer and the facto...

Q: You are the President and the nation is slipping into recession. Using the Keynesian AD/AS theories ...

A: The Keynesian viewpoint is concerned with aggregate demand. The concept is simple: businesses only p...

Q: In Billion of AED Gross domestic product 23,560 Goods produced in foreign countries with UAE. Capita...

A: The Gross Domestic Product (GDP) can be measured in multiple approaches, like:  The Product Approac...

Q: Sophia’s preferences over donuts (D) and coffee (C) are represented by the utility function: u(D,C)=...

A: The utility function implies donuts and coffee are perfect complements and consumed in fixed proport...

Q: The value of the gross domestic product in 2000, in terms of 1990 prices, was (A) $600. (B) $700. (C...

A: Formula for GDP deflator can be calculated by dividing the nominal GDP by real GDP.

Q: Let us consider the following version of the Heckscher-Ohlin model with two countries H and F, two g...

A: Given Information: The relative price of good x increases. Production of good X is skilled labour i...

Q: What is demand-deficient unemployment? a) Unemployment due to asymmetric information on the side of...

A: A person is said to be unemployed if he/she is willing to work and looking for it but not able to fi...

Q: A car financing firm offers the following scheme for an entry level Toyota Rush 2021 model: Selling...

A: NOMINAL RATE IS THE ANNUAL INTEREST RATE WITHOUT CONSIDERING ANY EFFECT OF COMPOUNDING. THIS RATE IS...

Q: a)  Compute the nominal GDP in 2018. b)  Compute the real GDP in 2018? c) Compute the nominal GDP in...

A: Given  2018 as the base year Nominal GDP = Current Year price * Current year quantity Real GDP = Pri...

Q: A Biomass Power Plant uses biodegradable wastes as fuel to produce electricity. The cost A dollars p...

A: Given Cost function: A=12+0.3B+0.27B2        ... (1) Where B is in megawatts Revenue function: R=15B...

Q: Should a firm shut down immediately if it is making losses?

A: A firm making losses means it's revenues generated are lesser than the total cost incurred by the fi...

Q: Which long-run average total cost (LRTC) graph exhibits diseconomies of scale? LRATC LRATC

A: "Correct option is the first graph which is upward sloping."

Q: Describe and show on a graph the effects on output and welfare if the government regulates a monopol...

A: Monopoly refers to the type of market where only one individual controls all the supply or productio...

Q: Explain the difference between market capitalism, centrally planned capitalism, centrally planned so...

A: The economy is an area where we earn our living. It refers to a system where we perform the major ac...

Q: A person's wealth is a stock; his income and expenditure are flows. • The number of people getting t...

A: Stock is that quantity of economic variable which is measured at a particular point in time.  Stock ...