Use the Following to Answer Question

question 131

Multiple Choice

Use the following to answer question:
-(Figure: The Market for Productivity Apps) Use Figure: The Market for Productivity Apps.If the government imposes a tax of $1 in this market,consumers will pay _____ more per app and purchase _____ fewer apps.

• A)$1;5
• B)$1;25
• C)$0.50;5
• D)$0.50;20

Recognize the different types of barriers to entry that sustain monopolies.

Understand the relationship between economies of scale and natural monopolies.

Analyze the significance of patents and government franchises in maintaining monopolies.

Distinguish between the profit-maximizing strategies of monopolies and competitive firms.

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Definitions:

Taxes

Mandatory payments made to the government, taken from individuals' earnings and company gains, or included in the prices of certain products, services, and dealings.

Short Run

The short run is a time period in which at least one input is fixed, limiting the ability of a firm to adjust to market changes.

Long Run

A period in which all inputs and factors of production can be varied, and all costs are variable, allowing for complete adjustment to changes.

Recession

A temporary downturn in economic activity, characterized by decreased trade and industrial production, usually recognized by consecutive quarters of declining GDP.