Compare the effects of a $ 1-per-unit excise subsidy when applied to a monopoly and to a competitive industry with the same cost and demand conditions. In which case will price fall more? In which case will output increase more?
Answer to relevant QuestionsExplain what natural monopoly is in terms of the relation-ship between cost curves and the demand curve. If the market is left to itself, what price and output will result?“College teachers are no more productive today than they were 50 years ago, yet they are paid three times as much today. They are obviously not being paid according to their marginal productivity.” Discuss.“Recently, the demand for DVD players has increased rapidly, while the demand for radios has hardly budged. Therefore, the fact that workers are better paid in the DVD player industry is not surprising.” Would you be ...In equilibrium, the interest rate equates the willingness of people to give up present goods in return for future goods and the ability of the economy to transform present goods into future goods. Explain.As the owner of a retail store, you would like to be able to pay your sales people lower wages. What problems would you confront if you attempt to establish a cartel among employers to force down wage rates?
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