--%>
Assignment Help - homework help

Problem on effect of a price decrease on total revenue

1. Is it possible for any country to have made gains in access (at the expense of quality) of their rural healthcare system, without any gains in efficiency?  Explain using a PPF diagram.

2. If the own price elasticity for a good is -2.5, what is the likely effect of a price decrease on total revenue?

3. You’ve been asked to assess two alternatives to regulating a monopoly using a ceiling price. Option A is to set the ceiling price 25% below the monopolist’s equilibrium price. Option B is to set the ceiling price 50% below the monopolist’s equilibrium price. Assume your only concern is the efficiency consequences under each option. Which option is preferable? Explain.

   Related Questions in Microeconomics

  • Q : Words of Henry George about Economic

    Henry George believed that: (1) landowners deserve the economic rent that their land holdings provide. (2) a single tax on land equal to the unearned surplus would pay for all needed government. (3) economic inefficiency would result from a tax on the

    		•
  • Q : Illustrations of monopoly power The

    The best illustrations of monopoly power in the United States are possibly: (w) local public utility companies. (x) state university systems. (y) the national TV networks. (z) national defense firms. Hey friends pl

    		•
  • Q : Determine economic rent by annual income

    The philosophers in this demonstrated graph are enjoying economic rent equal to: (w) shaded area A. (x) shaded area B. (y) shaded area C. (z) the sum of the shaded areas.

    Q : Most desperate market participants of

    Tax burdens on transactions are probably to be disproportionately borne through the relatively as “most desperate” market participants those, who are: (1) sellers when the market supply curve is relatively

    		•
  • Q : Accepting prevailing market price by

    Unlike firms along with substantial market power, price takers: (w) control the prices of purchases or sales, but not their quality. (x) have no choice but to accept the prevailing market price. (y) adjust output and price to maximize profit. (z) are

    		•
  • Q : Gini Coefficient in Loren Curve A Gini

    A Gini coefficient for this demonstrated figure can be computed as: (w) area A minus area B. (x) area A × area B.  (y) area C minus [area A + area B]. (z) [area A] / [area A + area B].

    Q : Problem related to supply and demand

    Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread and that potatoes are a consumer substitute for bread, we would expect the price of wheat to: A) rise, the supply of bread to increase,

    		•
  • Q : Opinion about kinked demand curve model

    George Stigler concluded which the kinked demand curve model is incorrect to the extent that this depends on: (w) marginal cost pricing. (x) pure competition. (y) interdependent decision making.  (z) sticky prices.

  • Q : Under negative income tax the net income

    Under the negative income tax system demonstrated in this figure, where a family of four all along with earned income of $60,000 yearly would have a net [after-tax] income of: (1) $37,500 per year. (2) $42,500 per year. (3) $50,000 per year. (4) $55,0

    		•
  • Q : Profit Maximization and the Demand for

    Each and every profit-maximizing firm which can cover its variable costs will hire the labor: (1) Just to the point of the diminishing returns. (2) Just to the point where MRP = ARP for the final worker hired. (3) Beyond the point of the diminishing r

    		•