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 127 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?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

Patients who cannot swallow may receive nutrition via a parenteral route—usually, a catheter is inserted through the chest into a large vein going into the heart.

Did you know?

Drug-induced pharmacodynamic effects manifested in older adults include drug-induced renal toxicity, which can be a major factor when these adults are experiencing other kidney problems.

Did you know?

Though newer “smart” infusion pumps are increasingly becoming more sophisticated, they cannot prevent all programming and administration errors. Health care professionals that use smart infusion pumps must still practice the rights of medication administration and have other professionals double-check all high-risk infusions.

The recent mass upheavals in Tunisia, Egypt, Libya, Yemen, and Syria gave political scientists a cha The recent mass upheavals in Tunisia, Egypt, Libya, Yemen, and Syria gave political scientists a cha
How to find the maximum and minimum of a quadratic relation How to find the maximum and minimum of a quadratic relation
Reconstruction Drawing of Trajan's Market Reconstruction Drawing of Trajan's Market
Please explain the different Rf values for xanthophyll’s in paper chromatography compared to ... Please explain the different Rf values for xanthophyll’s in paper chromatography compared to ...
Iraqi market Iraqi market
Sonal bought a coat for $198.88, which included 8% PST and 5% GST. What was the selling price ... Sonal bought a coat for $198.88, which included 8% PST and 5% GST. What was the selling price ...
Video: Exercise and cardiac output

For a complete list of videos, visit our video library