hw5 - BUAD 351 - Economic Analysis for Business Decisions...

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BUAD 351 - Economic Analysis for Business Decisions Homework 5 due: Tue 04/14/2009 PART (i): multiple choice please provide the answers in the following box: question answer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 a. Its marginal revenue must equal its marginal cost at that quantity b. Its marginal revenue must exceed its marginal cost at that quantity c. Its marginal revenue must be less than its marginal cost at that quantity d. Its marginal revenue must be equal to zero 2. Suppose that your marginal cost of production is 3 and your elasticity of demand E d is 10. a. 3 b. 3 1 3 c. 3 2 3 d. 4 3. Monopoly occurs for several reasons, including a. invention and patent of a new product. b. economies of scale. c. ownership of a critical resources. d. All of the above 4. Self-selection strategies induce the high demand customers to buy the plan that is designed to extract surplus from them, instead of opting for the plan designed for low demand customers. a. True b. False a. Is the amount by which its price exceeds its marginal cost, expressed as a percentage of its price b. Is the amount by which its marginal cost exceeds its average cost c. Is the amount by which its average cost exceeds its marginal cost 1
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6. The deadweight loss from monopoly pricing is a. The amount by which aggregate surplus falls short of its minimum possible value, which is attained in a perfectly competitive market b. The amount by which consumer surplus exceeds producer surplus c. The amount by which aggregate surplus falls short of its maximum possible value, which is attained in a perfectly competitive market d. The amount by which producer surplus exceeds consumer surplus a. maximized. b. zero.
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This note was uploaded on 04/14/2009 for the course BUAD 351 taught by Professor Eastin during the Spring '07 term at USC.

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hw5 - BUAD 351 - Economic Analysis for Business Decisions...

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