Author Question: One practical implication of a kinked market supply curve is that: A) producer surplus is not ... (Read 150 times)

jake · **on:** Jul 1, 2018

One practical implication of a kinked market supply curve is that:

A) producer surplus is not defined at the kink point.
B) the MC = MR rule does not hold at the kink point.
C) the market supply elasticity for a price increase may be different than the market supply elasticity for a price decrease at the kink point.
D) All of the above are true.

Question 2

In insurance markets, moral hazard creates economic inefficiency because:

A) insurance companies are price setters rather than price takers.
B) insurance products are not homogenous goods.
C) there are many buyers but only a few sellers.
D) insured individuals do not correctly perceive the costs or benefits of their actions.