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Author Question: A positive markup is earned by a firm if its A) price exceeds its marginal cost. B) marginal ... (Read 131 times)

WWatsford

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on: Jun 29, 2018
A positive markup is earned by a firm if its
 
  A) price exceeds its marginal cost.
  B) marginal revenue equals marginal cost.
  C) price equals marginal cost.
  D) price equals average total cost.

Question 2

What is a black market and how does it influence the market for rental housing if a rent ceiling creates a housing shortage? What determines the level of the black market rent?
 
  What will be an ideal response?


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kmb352

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

A

Answer to Question 2

A black market is an illegal market in which the price exceeds the legally imposed price ceiling. When a rent ceiling creates a housing shortage, frustrated renters offer a rent above the legal level in order to get an apartment. The level of the black market rent depends on how tightly the rent ceiling is enforced. With loose enforcement, the black market rent is close to the unregulated rent. With strict enforcement, it is close to the maximum price that renters are willing to pay given the rent-ceiling quantity of housing supplied.


WWatsford

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

Bigfoot1984

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Reply 3 on: Yesterday
Excellent

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