Answer the following statement(s) true (T) or false (F)
1. The demand curve for a monopolistic firm is the same as the demand curve for its market.
2. A monopolist’s marginal revenue always less than the price.
3. A monopolist will intentionally operate on the inelastic portion of its demand curve.
4. If marginal costs exceed marginal revenues, profits drop.
5. Multiplying average total cost by the output level gives the total cost.
1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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Within a monopolistically competitive industry
A) firms can freely enter and exit and economic profits are zero in the long run. B) firms can freely enter and exit and economic profits are greater than zero in the long run. C) there are some barriers to entry and exit and economic profits are zero in the long run. D) there are some barriers to entry and exit and economic profits are greater than zero in the long run.
Refer to Scenario 1-2. Had the firm not produced and sold the last 500 cigars, would its profit be higher or lower, and if so by how much?
A) Its profit would be $500 lower. B) Its profit would be $500 higher. C) Its profit would be $1,000 higher. D) Its profit would be $1,500 lower.
Banks engage in regulatory arbitrage by
A) keeping high-risk assets on their books while removing low-risk assets with the same capital requirement. B) keeping low-risk assets on their books while removing high-risk assets with the same capital requirement. C) hiding risky assets from regulators. D) buying risky assets from arbitragers.
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price for that good.
According to the graph shown, the government can restrict trade by imposing a quota of:
A. 1500. B. 350. C. 900. D. 1150.