Unregulated monopolies can often make an economic profit in the long run because
A) they receive government subsidies.
B) they have high costs.
C) barriers to entry prevent competing firms from entering the market.
D) the risks of running a monopoly are high.
Ques. 2Ernie's Earmuffs produces 200 earmuffs per year at a total cost of 2,000 and 400 of this cost is fixed. What is Ernie's average total cost?
A) 12
B) 10
C) 8
D) 2
Ques. 3What is the major advantage of the corporate form of business organization?
A) Its owners have limited liability.
B) Its owners have unlimited liability.
C) Its profits are not taxed.
D) Its profits are taxed twice.
Ques. 4The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. What is the deadweight loss from this tax?
A) 1,500
B) 3,000
C) 4,500
D) 6,000
Ques. 5What is the effect on the price and quantity of wooden desks of a rise in the price of wood?
A) The equilibrium quantity of wooden desks increases and the equilibrium price falls.
B) The equilibrium quantity of wooden desks increases and the equilibrium price rises.
C) The equilibrium quantity of wooden desks decreases and the equilibrium price falls.
D) The equilibrium quantity of wooden desks decreases and the equilibrium price rises.
Quick Reply
