If an industry consists of only two firms with equal market shares, then the Herfindahl index is
a. 50
b. 100
c. 2,500
d. 5,000
e. 10,000
D
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What is marginal external cost? Give an example
What will be an ideal response?
The demand curve of a monopolist is
a. identical to the marginal cost curve. b. downward sloping and above the marginal revenue curve. c. downward sloping and below the marginal revenue. d. elastic because of a recognized interdependence with other firms.
In a closed economy, if Y and T remained the same, but G rose and C fell but by less than the rise in G, what would happen to public and national saving?
a. public and national saving would rise b. public and national saving would fall c. public saving would rise and national saving would fall d. public saving would fall and national saving would rise
Suppose that a monopolistically competitive market is in its long-run equilibrium. If the market demand curve shifts to the right due to changes in consumer preferences:
A. the number of firms in the market will increase in the short run. B. firms will earn positive economic profits in the short run. C. firms' average costs of production will increase as they increase output levels in the short run. D. None of these