Just like a monopolist, a monopolistically competitive firm:
A. cannot sell additional units of output without lowering the price.
B. is a price taker.
C. sets the price according to marginal revenue and marginal cost; the demand curve doesn't matter.
D. faces a perfectly elastic demand curve.
A. cannot sell additional units of output without lowering the price.
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Assume the market is in equilibrium in the graph shown at demand D and supply S1. If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true?
A. Consumer surplus increases, and total surplus increases.
B. Consumer surplus decreases, and total surplus increases.
C. Consumer surplus increases, and total surplus decreases.
D. Consumer surplus decreases, and total surplus decreases.
The study by economists Cox and Alm found that the 2006 after-tax income of the richest fifth of U.S. households is
a. equal to the after-tax income of the poorest fifth. b. 7 times the after-tax income of the poorest fifth. c. 14 times the after-tax income of the poorest fifth. d. 21 times the after-tax income of the poorest fifth.
A usury ceiling will be effective depending on
A. whether the usury rate is above 10 percent. B. whether the usury rate is above 8 percent. C. whether that rate is below what the equilibrium rate of interest would have been in a free market. D. how well organized the lending institutions are.
Which of the following is not one of the three critical characteristics of efficient property rights?
A) Externality B) Transferability C) Exclusivity D) Enforceability