Which of the following is a possible explanation for the fall in prices after an industry is monopolized by combining a group of competitors?
a. A monopolist faces a downward sloping demand curve. Hence, output expansion leads to lower prices.
b. A reduction in price increases producer surplus. Hence a monopolist may reduce the price of his product.
c. A monopolist may reduce prices to make it difficult for other firms to compete.
d. A monopolist can increase profits by reducing price when its cost of production declines due to increased size of the new firm. The fall in price is less than the decline in cost.
D
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________ in the domestic interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to appreciate, everything else held constant
A) An increase; right B) An increase; left C) A decrease; right D) A decrease; left
Which one of the following is NOT a characteristic of public goods?
A) They are indivisible. B) It is difficult to charge people on the basis of how much they use. C) Public goods can be used by increasing numbers of people at no additional cost. D) Public goods are subject to the principle of rival consumption.
Which of the following raises the economic freedom of a country?
a. Limited international movement of productive resources b. Higher taxes c. Red-tapism and bureaucracy d. Reduction of trade barriers like tariffs and quotas e. Reduction of government subsidies on gasoline
Oligopolistic firms are the only ones that consider their rivals' actions when making decisions about output and price
a. True b. False