Monopolists are said to be allocatively inefficient because:
A. They produce where MR > MC
B. At the profit-maximizing output price is greater than AVC
C. They produce only the type of product they desire and do not consider the consumer
D. At the profit-maximizing output the marginal benefit of the product to society exceeds its marginal cost
D. At the profit-maximizing output the marginal benefit of the product to society exceeds its marginal cost
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Norma receives an increase in her nominal income. She complains that the current inflation rate of six percent erodes the real purchasing power of her additional nominal income. This is true
a. only if the increase in her nominal income is less than six percent. b. only if the increase in her nominal income is more than six percent. c. since inflation always reduces purchasing power. d. only if her real income increases.
If the price is between $130 and $145, what will the firm do (a) in the short run? (b) in the long run?
Entry by competitive firms decreases the market price, while exit by competitive firms increases the market price. Explain why firms enter or exit an industry and why these price changes occur
What will be an ideal response?
Cartels persist despite laws against them because
A) international cartels are legal. B) it is impossible to convict firms. C) of the Prisoners' Dilemma issue. D) All of the above.