A firm can choose a quantity of output, and the price is then determined by
A. the government.
B. the supply schedule.
C. consumers’ demand.
D. the average cost.
Answer: C
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For a single-price monopoly, price is
A) greater than marginal revenue. B) one half of marginal revenue. C) equal to marginal revenue. D) unrelated to marginal revenue. E) always less than average total cost when the firm maximizes its profit.
With respect to the demand side, the classical model excludes
a. exogenous changes in investment b. exogenous changes in government spending. c. exogenous changes in taxes. d. exogenous changes in money demand. e. All of the above
Cost-reduction generates
a. Increases in long-run profitability b. Increases in long-run profitability only if the cost reduction is difficult to imitate c. Decreases in long run profitability d. No change in profitability
An advertising race among oligopolists may be rational if it
a. is defense advertising. b. raises entry barriers. c. increases cost per unit of sales. d. encourages new entrants.