If the Marginal Revenue Curve Is Twice as Steep as the Demand

question 51

Multiple Choice

If the marginal revenue curve is twice as steep as the demand curve, a tariff imposed on a foreign monopoly seller will raise the domestic price by _______________ of the tariff and lower the seller's net price by _______________ of the tariff.

• A) one-fourth; three-fourths
• B) 10%; 90%
• C) one-half; one-half
• D) 100%; 0%

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Definitions:

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Endorse

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Partnership

A legal arrangement in which two or more individuals or entities agree to operate a business jointly and share its profits and losses.

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A financial instrument or document that is payable to a specific person or entity, as named on the document.