When markets are contestable, a monopoly firm must behave as if it had competitors, even though the market structure is monopolistic.
Answer the following statement true (T) or false (F)
True
In contestable markets, which are markets subject to potential entry if prices or profits increase, monopoly behavior may be restrained by potential competition.
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In a perfectly competitive market, the average revenue curve of a firm is
A) the same as its total revenue curve. B) the same as its demand curve. C) the same its economic profits. D) the difference between its total revenue curve and its marginal revenue curve.
The income elasticity of demand refers to:
A. a change in income following a change in quantity demanded. B. the change in income required for quantity demanded to change by 1%. C. the substitution of one good for another as income changes. D. the percentage change in quantity demanded resulting from a 1-percent increase in income.
Figure 10-8
The economy depicted in is in
a. short-run equilibrium at less than the full-employment output level.
b. short-run equilibrium at an output level beyond full employment.
c. long-run equilibrium at point a.
d. long-run equilibrium at point b.
Suppose that Dallas derives 40 utils of total utility from eating 3 hotdogs and 42 utils of total utility from eating 4 hotdogs. What is Dallas' marginal utility from eating the 4th hotdog?
A. 6 B. 6.67 C. 7 D. 2