If a monopolist discovers that it is operating at a level of output where price is less than average variable costs, it will continue to operate in the short run.
Answer the following statement true (T) or false (F)
False
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According to a study of the U.S. demand for alcoholic beverages, the price elasticity of demand for beer is -0.30. Which of the following could explain why the price elasticity of demand for beer is low?
A) More and more people are switching to wine and cocktails rather than beer. B) Beer is an inferior alcoholic beverage. C) There are only a few major suppliers of beer. D) The price of beer is relatively low and for many people it is a habit forming product.
A laissez-faire macroeconomic policy, based on a __________ in self regulating properties of the economy, implies __________ by the government
A) belief; active policymaking B) belief; noninterference C) disbelief; active policymaking D) disbelief; noninterference
In the long run, both monopolistically competitive and perfectly competitive firms attain
A) lowest cost production. B) positive economic profits. C) zero economic profits. D) productive efficiency.
What gives rise to a natural monopoly? How do consumers benefit from a natural monopoly?
What will be an ideal response?