Which of the following is true of marginal revenue for a monopolist that charges a single price?
a. P = MR because there are no close substitutes for the monopolist's product.
b. P > MR because the monopolist must decrease price on all units sold in order to sell an additional unit.
c. P < MR because the monopolist must decrease price on all units sold in order to sell an additional unit.
d. AR = MR because there are no close substitutes for the monopolist's product.
e. P = MR only at the profit-maximizing quantity.
B
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A. increases; decreases B. does not change; does not change C. increases; increases D. decreases; increases
Life insurance companies are regulated by state governments because
A) they have never experienced bankruptcy. B) they have never experienced profitability. C) they have never experienced widespread failures. D) they hold only highly liquid assets.
The process by which new products and methods of production are continuously replacing old ones is known as
a. the invisible hand principle. b. the production possibilities frontier. c. creative destruction. d. the fallacy of composition.
The price system
A. sends signals to producers. B. sends signals to consumers. C. is based on supply and demand. D. All of the choices are true about the price system.