Suppose that the profit maximizing level of output for the monopolist is 100 units, and ATC = $45.00; MC = $35.00; MR = $35.00; P = $45.00. What is the monopoly's profit?
A) -$1000
B) $4500
C) $0
D) $3500
Answer: C
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Congress imposes a price ceiling in the market for gasoline. It is below the equilibrium price. This will:
a. Lead to a surplus of gasoline b. Lead to a shortage of gasoline c. Decrease the demand for gasoline d. Increase the demand for large cars
The real-nominal principle states that
A) what matters to people is the face value of money or income. B) people respond more to explicit, or real, costs than to implicit costs. C) people respond more to implicit costs than to explicit costs. D) what matters to people is the purchasing power of money or income.
Suppose that the interest rate is greater than the equilibrium interest rate. Which of the following occurs?
I. There is an excess quantity of money. II. The quantity of money automatically increases. III. The interest rate falls. A) I B) I and II C) I and III D) I, II and III
A game in which the players explicitly coordinate their decisions to make themselves better off is a
A) cooperative game. B) noncooperative game. C) zero-sum game. D) negative-sum game.