The rule of MC = MR does not apply to a monopolist.
Answer the following statement true (T) or false (F)
False
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A monopoly firm will maximize profits by producing where
A) marginal revenue is the same in domestic and foreign markets. B) prices are the same in domestic and foreign markets. C) marginal revenue is higher in foreign markets. D) marginal revenue is higher in the domestic market. E) total revenue from domestic and foreign sales is maximized.
In the automobile industry, workers have just negotiated a new contract giving workers a large raise. There has also been an increase in the number of licensed drivers who are in the market for a new car
In the market for new automobiles, the effects that these changes will have on the equilibrium price and quantity are A) price will increase, and quantity will decrease. B) price will increase, and the effect on quantity is indeterminate. C) price will decrease, and quantity will increase. D) price will decrease, and the effect on quantity is indeterminate.
Suppose the index of leading economic indicators begins to decline for several months. Which of the following economic events will likely follow?
a. A recession. b. Severe inflation. c. Greater employment. d. Higher investment.
The presence of externalities favors ________ and the presence of other distortionary taxes favors ________.
A. neutral taxes; neutral taxes B. nonneutral taxes; neutral taxes C. neutral taxes; nonneutral taxes D. nonneutral taxes; nonneutral taxes