As a firm moves from a competitive industry to a monopoly:
A. average revenue falls and profits rise.
B. its profits rise.
C. its profits fall.
D. marginal costs rise and profits fall.
Answer: B
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The rate of return on capital is
A) much higher in rich countries than in poor countries. B) much lower in rich countries than in poor countries. C) not substantially higher in poor countries than in rich countries. D) not substantially higher in rich countries that in poor countries.
At potential GDP
What will be an ideal response?
Explain why the following graph is likely to represent the long-run equilibrium for a representative firm in monopolistic competition. What will be the product price, output, and amount of economic profit?
What will be an ideal response?
A government report that makes working in a particular industry more attractive to workers will most likely ________ the number of workers hired in that industry, and ________ the wage paid to those workers.
A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease