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Author Question: A firm charging prices below marginal cost is said to be engaged in A) price fixing. B) ... (Read 140 times)

littleanan

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on: Jul 1, 2018
A firm charging prices below marginal cost is said to be engaged in
 
  A) price fixing.
  B) predatory pricing.
  C) a cartel.
  D) irrational behavior.

Question 2

The deadweight loss represent the sum of added consumer and producer surplus if the firm would produce the quantity where P = MC.
 
  Indicate whether the statement is true or false


tuwy

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Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

True . If P = MC is produced quantity increases and the deadweight loss is turned into CS and PS. This will increase total welfare.


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