Supply curves are usually assumed to slope upward because
a. profits fall as prices rise
b. a higher price leads to increases in demand
c. a higher price leads to decreases in demand
d. a higher price attracts resources from other less valued uses
e. firms drop out of the market as prices rise
D
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If diminishing marginal returns are present for an input, then the marginal revenue product will be decreasing.
Answer the following statement true (T) or false (F)
Saving is a ________ variable, and wealth is a ________ variable
A) stock; flow B) stock; stock C) flow; flow D) flow; stock
Consumers may not experience the benefits of economies of scale if a natural monopoly:
A.) Raises price and fails to pass cost savings on to consumers. B.) Engages in marginal cost pricing. C.) Raises output beyond efficient levels. D.) Is regulated by the government.
Answer the following statements true (T) or false (F)
1. A firm sells 99 units of output when price equals $10, and 100 units of output when price equals $9. Its marginal revenue for the 100th unit of output is negative. 2. The monopolist's demand curve is more elastic than the industry demand curve. 3. At the inelastic portion of a monopolist's demand curve, the marginal revenue of each extra unit of output is positive. 4. As a monopolist lowers the price of its product from a high level, it finds that its total revenue may at first increase and then, below a certain price, its total revenue begins to decrease.