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Author Question: The equivalent variation is always less than the consumer's income Indicate whether the statement ... (Read 53 times)

hbsimmons88

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on: Jul 1, 2018
The equivalent variation is always less than the consumer's income
 
  Indicate whether the statement is true or false

Question 2

Mergers harm society.
 
  A) True. Firms merge to avoid antitrust laws and increase their prices.
  B) Maybe. It depends on whether the effect on prices is larger from reducing competition or increasing efficiency.
  C) False. Firms gain economies of scale and pass the price savings on to their customers.
  D) True. Total surplus is reduced when firms merge.


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Harbringer

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Reply #1 on: Jul 1, 2018
Answer to Question 1

True . The amount a person will pay to prevent a price change (EV) cannot exceed their available income.

Answer to Question 2

B


hbsimmons88

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Reply 2 on: Jul 1, 2018
Gracias!

momolu

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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