Does the threat of entry reduce the monopoly problem?
What will be an ideal response?
Yes, as an insecure monopolist will produce more than a secure monopolist, getting closer to the competitive outcome.
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Suppose two owners of a store agree to split the profit equally regardless of the number of hours each spends working at the store. As a result,
A) production efficiency is achieved. B) each enjoys only half the marginal benefit of an additional hour working in the store. C) one will work all of the time while the other works zero hours. D) each will work as many hours as if he or she were the sole owner.
The Phillips curve shows
A) a positive relationship in the long run between the rate of inflation and the rate of unemployment. B) a negative relationship between the inflation rate and the unemployment rate, at least in the short run. C) a positive relationship between contractionary monetary policy and higher price levels. D) a positive relationship between price stability and constant, small-increment changes in the fiscal policy on the part of the Fed.
What is the name of the monopolist having a declining long-run average cost throughout the market?
a. Monopolistic competition. b. Monopoly by legal barrier. c. Natural monopoly. d. Contrived monopoly.
Which of the following will decrease the amount of a good that is traded in the market?
a. price floors and price ceilings b. excise taxes, price floors, and subsidies c. excise taxes d. subsidies e. price floors, price ceilings, and excise taxes