Refer to the graph shown. If this monopolist were forced to set price equal to average cost, it would charge a price of:
A. $8.
B. $3.
C. $12.
D. $2.
Answer: B
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What is TRUE when the credit market is in equilibrium?
A) The legal minimum wage equals the actual wage. B) Desired saving equals desired investment. C) Desired employment equals the number of jobs available. D) Desired consumption spending equals the total of saving plus investment.
In a modern dynamic economy such as the United States, full employment generally means
a. cyclical unemployment is present. b. everyone (excluding teenagers) that would like to work is employed. c. approximately 95 percent of the labor force is employed. d. 100 percent of the labor force is either working or seeking work.
Producers of paper products are most likely to be in favor of
A. Protectionism in the paper product market but free trade in the lumber market. B. Free trade in the paper product market and the lumber market. C. Free trade in the paper product market but protectionism in the lumber market. D. Protectionism in the paper product market and the lumber market.
Exhibit 20-1 Money market demand and supply curves
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As shown in Exhibit 20-1, assume the money supply curve shifts leftward from MS1 to MS2 and the economy is operating along the intermediate segment of the aggregate supply curve. The result will be a:
A. higher investment, lower real GDP, and lower price level. B. lower investment, lower real GDP, and lower price level. C. higher investment, higher real GDP, and higher price level. D. higher interest rate and no effect on real GDP or the price level.