Briefly explain the difference in the demand curves of monopolies and perfectly competitive firms.
What will be an ideal response?
In perfect competition, many buyers and sellers of homogeneous goods (resulting in a perfectly elastic demand curve) mean that competitive firms can sell all they want at the market price. They face a horizontal demand curve. The firm takes the price of its output as determined by the market forces of supply and demand. Monopolists, and all other firms that are price makers, face a downward-sloping demand curve. If the monopolist raises its price, it will lose some—but not all—of its customers.
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Refer to Scenario 14.1. Marco and Lisette decide to help each other out and agree to split any medical bills from their doctor. With this new arrangement, Lisette's dominant strategy will give her a net benefit of
A) $45. B) $75. C) $120. D) $150.
The economic problem with Medicare financing is that
A) there is a built-in incentive to provide fewer services by doctors. B) there is a built-in incentive to travel to Canada to receive medical services. C) the cost of providing services is falling annually. D) there is a built-in incentive to consume more services.
Inferior goods have negative income elasticities
a. True b. False Indicate whether the statement is true or false
The higher the reservation wage, the more likely one is to be unemployed.
Answer the following statement true (T) or false (F)