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

Author Question: Explain what will happen when the government imposes a minimum price that is below the market ... (Read 116 times)

Mimi

  • Hero Member
  • *****
  • Posts: 542
on: Jun 29, 2018
Explain what will happen when the government imposes a minimum price that is below the market equilibrium price. Why is this true?
 
  What will be an ideal response?

Question 2

A bureaucrat at a public utility commission hearing testifies that the local area telephone monopoly is able to maximize its revenue. For that reason the rate-hike request should be denied.
 
  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

bubulittle310@msn.cn

  • Sr. Member
  • ****
  • Posts: 281
Reply #1 on: Jun 29, 2018
Answer to Question 1

The minimum price will have no impact on the market. This is true because the price floor will only have an impact when the market equilibrium price is below it. Firms and consumers will otherwise not change their behavior.

Answer to Question 2

The goal of any firm is to maximize profits, not to maximize revenue. Even if the monopoly were maximizing its revenue this would be no guarantee that it is maximizing its profits.


Mimi

  • Hero Member
  • *****
  • Posts: 542
Reply #2 on: Jun 29, 2018
Thank you :)


bubulittle310@msn.cn

  • Sr. Member
  • ****
  • Posts: 281
Reply #3 on: Jun 29, 2018
Happy to help you


« previous next »
 

Did you know?

The average person is easily confused by the terms pharmaceutics and pharmacology, thinking they are one and the same. Whereas pharmaceutics is the science of preparing and dispensing drugs (otherwise known as the science of pharmacy), pharmacology is the study of medications.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

The modern decimal position system was the invention of the Hindus (around 800 AD), involving the placing of numerals to indicate their value (units, tens, hundreds, and so on).

This chart shows the various lines of responsibility and how they differ in presidential and parliam This chart shows the various lines of responsibility and how they differ in presidential and parliam
The world attempted to deal with Somalia as if it were a real country but painfully learned that Som The world attempted to deal with Somalia as if it were a real country but painfully learned that Som
The net price of an article is $79.84. What is the list price if a discount of 23% was allowed? The net price of an article is $79.84. What is the list price if a discount of 23% was allowed?
A car wash reduced the price of a basic wash as a promotion and test of the market. With the ... A car wash reduced the price of a basic wash as a promotion and test of the market. With the ...
Explain the myogenic autoregulation of the glomerular filtration rate Explain the myogenic autoregulation of the glomerular filtration rate
What is the minimum number of straight, continuous lines that are necessary to c What is the minimum number of straight, continuous lines that are necessary to c
Video: Mechanics of Sound Animation

For a complete list of videos, visit our video library