In constructing the monopolist's input demand curve, which of the statements is FALSE?
A. A monopoly restricts output and hires fewer units of labor than a perfectly competitive industry.
B. The supply curve a monopoly faces is horizontal because the monopoly is a price taker.
C. The demand curve has a negative slope due to the law of diminishing marginal product.
D. Marginal revenue is always positive.
Answer: D
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If a firm in a perfectly competitive market faces an equilibrium price of $5, its marginal revenue
A) will be greater than $5. B) will be less than $5. C) maybe either greater or less than $5. D) will also be $5. E) will be any amount but $5.
Spending on R&D among a group of firms is equally likely to increase or to decrease
a. True b. False Indicate whether the statement is true or false
Refer to Figure 5-4. Suppose the point labeled B is the “halfway point” on the demand curve and it corresponds to a price of $5.00. Then, between prices of $4.99 and $5.01, the price elasticity of demand is
a. less than 1 but greater than zero. b. equal to 1. c. greater than 1. d. equal to zero. e. equal to infinity.
Ceteris paribus, an increase in the number of sellers of running shoes causes equilibrium price to
A. Decrease and equilibrium quantity to decrease. B. Increase and equilibrium quantity to increase. C. Decrease and equilibrium quantity to increase. D. Increase and equilibrium quantity to decrease.