A monopolist is producing at an output level at which MR = $9 and MC = $8. It could increase profits
A) by increasing both output and price.
B) by reducing output and by increasing price.
C) by reducing both output and price.
D) by increasing output and by reducing price.
Answer: D
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Prices for industrial commodities such as steel rods or machine tools are
A) heavy prices. B) custom prices. C) auction prices. D) sticky prices.
Which of the following would tend to increase AD?
a. a commercial bank using excess reserves to extend a loan to a customer b. a commercial bank purchasing U.S. securities from the Fed as an investment c. an increase in reserve requirements d. an increase in the discount rate
A competitive industry consists of 100 firms. The short-run marginal cost curve for each firm is given by MC = 200 + .3Q. The demand curve faced by the industry is given as P = 400 - .1Q. How much profit is each firm making if fixed costs are $375 per firm?
What will be an ideal response?
Suppose that a new iPod with 30 new features costs $100 more to produce and buy than does the previous version. The $100 price increase
A. is not added to the inflation rate because consumer electronics are not part of the consumer market basket. B. is not added to the inflation rate because it represents an improvement in quality. C. is added to the inflation rate. D. is divided by the additional benefits and then added to the inflation rate.