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

Author Question: A profit maximizing single-price monopolist sets price equal to marginal cost. Indicate whether ... (Read 113 times)

jman1234

  • Hero Member
  • *****
  • Posts: 560
on: Jun 29, 2018
A profit maximizing single-price monopolist sets price equal to marginal cost.
 
  Indicate whether the statement is true or false

Question 2

When the price of raisins falls, the quantity of raisins demanded rises. Explain this change in terms of income and substitution effects.
 
  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

smrtceo

  • Sr. Member
  • ****
  • Posts: 344
Reply #1 on: Jun 29, 2018
Answer to Question 1

FALSE

Answer to Question 2

When the price of raisins falls, households have more purchasing power than before. If raisins are a normal good, this means that they will consume more of them. This is the income effect. Also, a decrease in the price of raisins makes raisins relatively less expensive. Thus, households will shift toward purchasing raisins from purchasing relatively more expensive goods. This is the substitution effect. Both effects imply that the quantity of raisins demanded will rise as the price of raisins falls.


jman1234

  • Member
  • Posts: 560
Reply 2 on: Jun 29, 2018
:D TYSM

helenmarkerine

  • Member
  • Posts: 324
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Blood is approximately twice as thick as water because of the cells and other components found in it.

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

Did you know?

Oliver Wendell Holmes is credited with introducing the words "anesthesia" and "anesthetic" into the English language in 1846.

Did you know?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

The tone of the nurse-patient introduction sets the stage for the patient interview and patient care The tone of the nurse-patient introduction sets the stage for the patient interview and patient care
Wheat and Cotton Prices and Consumer Price Indexes, 1865–1896 Wheat and Cotton Prices and Consumer Price Indexes, 1865–1896
Drug A is more potent than Drugs B and C. Drugs A and C have equal efficacy because both drugs have ... Drug A is more potent than Drugs B and C. Drugs A and C have equal efficacy because both drugs have ...
Typical Startup Cost Categories Cont. Typical Startup Cost Categories Cont.
Under ideal conditions, a single cell of the bacterium E. coli would divide every 20 minutes to ... Under ideal conditions, a single cell of the bacterium E. coli would divide every 20 minutes to ...
Summary of Single Variable Discrete Models Summary of Single Variable Discrete Models
Video: Sister chromatids of a metaphase chromosome animation

For a complete list of videos, visit our video library