Suppose that nominal GDP in 2016 was less than real GDP in 2016. ...

[shofmannx20]

Suppose that nominal GDP in 2016 was less than real GDP in 2016. Given this information, we know for certain that
 
  A) real GDP in 2016 was greater than real GDP in the base year.
  B) the price level in 2016 was less than the price level in the base year.
  C) real GDP in 2016 was less than real GDP in the base year.
  D) the price level in 2016 was greater than the price level in the base year.

Question 2

Refer to Figure 15-19 to answer the following questions.
 
  a. What quantity will this monopoly produce and what price will it charge?
  b. Suppose the monopoly is regulated. If the regulatory agency wants to achieve economic efficiency, what price should it require the monopoly to charge?
  c. To achieve economic efficiency, what quantity will the regulated monopoly produce?
  d. Will the regulated monopoly make a profit if it charges the price that will achieve economic efficiency?
  e. Suppose the government decides to regulate the monopoly by imposing a price ceiling of 35. What quantity will the monopoly produce and what price will the monopoly charge?
  f. With the price ceiling of 35, what profit will the monopoly earn?

[tranoy]

Answer to Question 1

B

Answer to Question 2

a. Quantity = 835 units and Price = 59.
b. To achieve economic efficiency, the price = 20.
c. The quantity produced = 2,204 units.
d. No, the regulated monopoly will make a loss.
e. If the ceiling price is set at 35, the monopoly will produce a quantity of 1,740 units and charge the ceiling price of 35.
f. The monopoly will break even.

[shofmannx20]

Thanks for the timely response, appreciate it

[kjohnson]

Excellent