This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Refer to Figure 5-5. Suppose the current market equilibrium output of Q1 is not the economically ... (Read 97 times)

clippers!

  • Hero Member
  • *****
  • Posts: 828
on: Jun 29, 2018
Refer to Figure 5-5. Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality. The economically efficient output is Q2. In that case, diagram shows
 
  A) the effect of an excess demand in a market.
  B) the effect of a subsidy granted to producers of a good.
  C) the effect of a positive externality in the consumption of a good.
  D) the effect of a negative externality in the consumption of a good.

Question 2

Why does a monopoly firm not have a supply curve?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Moriaki

  • Sr. Member
  • ****
  • Posts: 341
Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

Firms that are price takers will decide how much to produce based on the given market price. The quantity at which the marginal cost of producing the last unit of a good is equal to any given market price determines the firm's supply decisions. However, monopolists do not vary their production based on market price because they set the price; it is not relevant to ask how much of a good a monopolist will produce at a given price. Since a monopolist's production decision is based on demand, it cannot be depicted as an independent supply curve (keep in mind that the supply curve is willingness to sell at various prices, regardless of demand). A monopolist chooses both price and quantity.


clippers!

  • Member
  • Posts: 828
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

zacnyjessica

  • Member
  • Posts: 345
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

The toxic levels for lithium carbonate are close to the therapeutic levels. Signs of toxicity include fine hand tremor, polyuria, mild thirst, nausea, general discomfort, diarrhea, vomiting, drowsiness, muscular weakness, lack of coordination, ataxia, giddiness, tinnitus, and blurred vision.

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Did you know?

To prove that stomach ulcers were caused by bacteria and not by stress, a researcher consumed an entire laboratory beaker full of bacterial culture. After this, he did indeed develop stomach ulcers, and won the Nobel Prize for his discovery.

Did you know?

Eating carrots will improve your eyesight. Carrots are high in vitamin A (retinol), which is essential for good vision. It can also be found in milk, cheese, egg yolks, and liver.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Bronchoscopy. Figure illustrates physician using a bronchoscope to inspect the patient’s bronchial t Bronchoscopy. Figure illustrates physician using a bronchoscope to inspect the patient’s bronchial t
Hydrostatic Equilibrium Hydrostatic Equilibrium
Vapour-liquid equilibrium acetone + water Vapour-liquid equilibrium acetone + water
EYEMA-O-BYERI (Reliquary Figure) EYEMA-O-BYERI (Reliquary Figure)
The dissociation equilibrium constants for the protonated form of alanine (a diprotic amino ... The dissociation equilibrium constants for the protonated form of alanine (a diprotic amino ...
Frequency distribution of phenotypes from the possible offspring in Figure 5.7. Height of the offspr Frequency distribution of phenotypes from the possible offspring in Figure 5.7. Height of the offspr
Video: Enzyme structure - Properties of enzymes

For a complete list of videos, visit our video library