Why are some of the markets that provide information likely to be dominated by monopolies?
What will be an ideal response?
Objective information about, say, the quality of a good or service or the risk associated with a particular activity is costly to obtain. Once it is obtained, however, the marginal cost of disseminating it is low. With the low marginal cost, the firm can enjoy significant economies of scale, so these markets might be close to natural monopolies, that is, a market in which one firm can meet the demand at lower cost than could two or more firms.
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The largest category of financial intermediary is the
A) commercial banks. B) savings-and-loans. C) insurance companies. D) mutual funds.
In the above figure, Graph D with Capital on the vertical axis and labor on the horizontal axis implies that
A) the marginal product of labor is increasing as more labor is employed. B) the marginal product of labor is decreasing as more labor is employed. C) the capital and labor are perfect substitutes. D) capital and labor have to be employed in fixed proportions.
Over the past 40 years, the most frequent target for the Fed's monetary policy has been the: a. prime interest rate
b. federal funds rate. c. M1 money supply. d. M2 money supply. e. required reserve ratio.
An early frost in the vineyards of Napa Valley would cause a(n)
a. increase in the demand for wine, increasing price. b. increase in the supply of wine, decreasing price. c. decrease in the demand for wine, decreasing price. d. decrease in the supply of wine, increasing price.