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Author Question: Using the utility possibilities frontier above explain three ways that this society of two ... (Read 26 times)

colton

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on: Jun 29, 2018
Using the utility possibilities frontier above explain three ways that this society of two individuals can be made better off without making anyone worse off if it starts at point A.
 
  What will be an ideal response?

Question 2

Comment on the following statement: A firm with market power is able to charge any price it likes.
 
  What will be an ideal response?


amanda_14

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Reply #1 on: Jun 29, 2018
Answer to Question 1

It could move to the right and make Bill better off while keeping Susan's utility constant. It could move upward and make Susan better off while keeping Bill's utility constant or it could move up and to the right and make both better off.

Answer to Question 2

The statement is false. A firm with market power is constrained by the demand for its product. The firm must charge a price that buyers are willing to pay.


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