If price-taking firms are required to install wet scrubbers on their chimneys to meet EPA regulations and their costs increase as a result, we would expect
a. demand for the product to fall
b. the market supply curve to shift to the left
c. the long-run economic profit of individual firms in the industry to fall
d. the short-run economic profit of individual firms in the industry to remain unchanged
e. short-run profits to rise as the industry raises price more than the cost of pollution
Question 2
Which of the following is not a condition required for a monopolist to price discriminate?
a. the demand curve facing the firm must be downward-sloping
b. the firm must exhibit strong economies of scale
c. there must be different groups of buyers with different price elasticities of demand
d. the firm must be able to prevent reselling of the product
e. the firm must have some market power
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