Assume a monopoly confronts the same costs and demand as a competitive industry. In this case, the monopolist produces
A. Less output and charges a lower price than the competitive industry.
B. More output and charges a higher price than the competitive industry.
C. The same output and charges the same price as the competitive industry.
D. Less output and charges a higher price than the competitive industry.
Answer: D
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The price elasticity of demand shows
A) the relationship between market price and household income. B) the proportionate amount by which the quantity demanded changes in response to a proportionate change in price. C) the quantity demanded at a given price. D) the proportionate amount by which the price changes in response to a proportionate change in quantity demanded.
Someone in Mexico has just ordered a U.S.-made automobile to be exported to Mexico. In the U.S. balance of payments, this purchase is a(n)
A. special draw. B. surplus item. C. accounting identity. D. deficit item.
According to current projections, in about 2034, the Social Security trust fund will
A. own about half of all the stock issued on the New York Stock Exchange. B. run out of assets. C. own all the government bonds that have been issued. D. start to run deficits.
The operation of supply and demand should be thought of as a process
A) for establishing consumer sovereignty. B) for increasing individual liberty. C) for maximizing social welfare. D) for maximizing total output. E) of mutual accommodation.