Use the following graph for a profit-maximizing pure monopoly to answer the next question.
The firm will set its price at
A. 0G.
B. 0K.
C. 0H.
D. 0J.
Answer: D
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In the long run, perfectly competitive firms make zero economic profit (their owners earn a normal profit) because
A) any economic profit would attract newcomers to the industry. B) the firms are incompetent. C) any economic loss would increase the demand for the good, thereby raising its price. D) there are many buyers and sellers.
Central banks sometimes attempt quantitative easing when
A) money growth is too high. B) inflation is too high. C) there is a liquidity trap. D) inflation is too low.
If, during the negotiations between the union and the management, a lockout occurs, it would be because
a. The management is trying to convince the union that it would stick to its strategy b. The union believes the management's threat c. All of the above d. None of the above
A tax on a good causes the size of the market to increase
a. True b. False Indicate whether the statement is true or false