If demand increases and supply simultaneously decreases, equilibrium price will rise.
Answer the following statement true (T) or false (F)
True
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Monopolistic competition is defined as a type of market structure in which
A) many firms produce the good. B) firms produce a homogeneous good. C) there are barriers to entry. D) firms can make an economic profit in the long run. E) firms can easily enter the market but cannot easily exit from it.
Asymmetric information problems are worse the __________ the borrowing firm, since there is __________ publicly available information about those firms
A) larger; more B) larger; less C) smaller; more D) smaller; less
Suppose a plaintiff hires a lawyer to represent her in a court case. Under which of the following contracts is efficiency in risk bearing assured?
A) The lawyer is paid by the hour. B) The lawyer receives a share of the settlement. C) The lawyer receives a fixed fee. D) It is impossible to determine without the degree of risk aversion for each.
A monopolist is producing at an output level at which MR = $6 and MC = $9. 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.