The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel.
If the market is competitive and unregulated, the equilibrium quantity of steel is ________ tons and the efficient quantity of steel is ________ tons. A) 2; 2
B) 2; 4
C) 4; 2
D) None of the above answers is correct.
Ques. 2In the above figure, if the firm is in monopolistic competition, its price will be
A) 1.
B) 2.
C) 3.
D) 4.
Ques. 3Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix shows the economic profit that each firm can make.
If the game is played repeatedly and Felix and Oscar both use a tit-for-tat strategy, then ________. A) Felix will make 10 million of economic profit and Oscar will cheat
B) Felix and Oscar will each make 1 million of economic profit
C) Felix will make -2 million economic of profit and Oscar will cheat
D) Felix and Oscar will each make 10 million of economic profit
Ques. 4Average total costs are total costs divided by
A) total output.
B) total fixed costs.
C) total variable costs.
D) the total number of workers employed.
Ques. 5A low concentration ratio suggests
A) a high degree of monopolization.
B) a high degree of competition.
C) that wages are a low share of costs.
D) that wages are a high share of costs.
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