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Unformatted text preview: output will also be the same, and thus will be allocatively efficient. b) True. In the long-run, price equals (minimum) average total cost and average total cost will decline by the full amount of the tax. Part IV a) 4 pairs, to customers A, B, C, and D, since marginal revenue (price) exceeds marginal cost for these four potential customers. b) Consumer surplus will be nil. c) If the customers can sell their jeans to one another, the monopolist will not be able to price discriminate. For example, if the monopolist sold a pair of jeans for $40 to customer D, customer D could sell the jeans to customers A, B, C. Part V Multiple Choice 1. (c) demand curve will be its marginal revenue curve 2. (c) be able to sell a lower output at each price 3. (e) None of the above (1,010 is correct) 4. (e) insufficient information to answer 5. (b) the cartel may breakdown if marginal revenue exceeds marginal cost for one of the oligopolists...
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This note was uploaded on 11/29/2011 for the course ECO 100 taught by Professor Indart during the Fall '08 term at University of Toronto- Toronto.
- Fall '08