Microeconomics

A profit-maximizing monopolist A) is guaranteed to lose money because

A profit-maximizing monopolist A) is guaranteed to lose money because of a lack of competition. B) is not guaranteed to make a positive profit. C) is guaranteed to make a positive profit, hence the desire to be a monopolist. D) is guaranteed to make a non-negative profit, otherwise government would step in to assist.   […]

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Date: September 9th, 2020

Explain why in the case of economies of scope the production possibili

Explain why in the case of economies of scope the production possibility frontier is bowed outward. What will be an ideal response?   ANSWER With economies of scope a firm uses less resources if it produces 2 goods jointly instead of producing the 2 goods in two firms separately. This means that the firm can […]

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Date: September 9th, 2020

If a pharmaceutical firm is researching ways to improve its heartburn

If a pharmaceutical firm is researching ways to improve its heartburn medicine and discovers a technique that will improve its allergy medicine, one could conclude that economies of scope exist in that industry. Indicate whether the statement is true or false   ANSWER True . Economies of scope imply that the cost of producing two […]

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Date: September 9th, 2020