In a natural monopoly, a firm has ______ over the relevant range of output with declining average total costs.
a. pure competition
b. economies of scale
c. illegal barriers
d. twenty-year patents
b. economies of scale
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In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPC is 0.6, then it would increase government purchases by
A. $31.25 billion. B. $10 billion. C. $20 billion. D. $40.50 billion.
Dole Co operates in a monopolistically competitive market. To try to earn an economic profit, Dole Co will
A) prevent other firms from entering the market. B) increase its product's price. C) continually seek to differentiate its product. D) increase output.
The real interest rate differs from the nominal rate in that ________
A) it more accurately represents the true cost of borrowing B) it varies negatively with changes in the rate of inflation C) it is the better indicator of credit market conditions D) all of the above E) none of the above
Total profit is maximized where
A. MR = MC. B. marginal profit is zero. C. the slope of the marginal profit curve is zero. D. All of the responses are correct.