When a second firm enters a monopolist's market:
A. the former monopolist's average cost increases as its output level decreases.
B. the demand curve facing the former monopolist shifts to the right.
C. the market price rises as the average cost increases.
D. None of these
Answer: A
You might also like to view...
According to one study, the price elasticity of demand for cigarettes is 0.25. To decrease the consumption of cigarettes by 8 percent, a tax on cigarettes must raise the price of cigarettes by
A) 32 percent. B) 25 percent. C) 2 percent. D) 3.1 percent.
Figure 5-16
Figure 5-16 shows Adam’s purchases of bananas and apples when apples cost $5 each and bananas $4 each. The information implies that Adam’s income
A. must be $9. B. must be $20. C. must be $40. D. cannot be determined without further information.
Christina Romer argued that
A) measured properly, GNP before 1929 varied substantially less over time than the official statistics showed. B) measured properly, GNP after 1929 varied substantially more over time than the official statistics showed. C) measured properly, economic expansions after 1929 were shorter than the official statistics showed. D) measured properly, economic expansions before 1929 were shorter than the official statistics showed.
Scarcity implies that people must
A) be miserable. B) be selfish. C) make choices. D) not be selfish.