If entry-restricting legal barriers effectively organized the funeral home industry of a large city into a monopoly cartel, economic theory indicates that, compared to the previously competitive situation,
a. the price of funeral services would decline, and output would increase.
b. both the price and output of funeral services would decline.
c. the price of funeral services would increase, and output would decline.
d. both the price and output of funeral services would increase.
C
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If Year 1 is the base year, the real GDP of Year 2 is
A) $800. B) $1050. C) $1900. D) $2400.
Marginal cost is defined as
A. the rate at which fixed cost changes with output. B. the rate at which total variable cost changes with output. C. total cost minus variable cost. D. the rate at which average cost changes with output.
The production function for a competitive firm is Q = K.5L.5. The firm sells its output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at 25 units. The profit-maximizing quantity of labor is:
A. 1. B. 10. C. 2. D. None of the answers are correct.
If a person is unemployed because their industry has moved to another country, economists refer to the person as
A. cyclically unemployed. B. frictionally unemployed. C. underemployed. D. structurally unemployed.