Describe the supply curve in a monopoly market
What will be an ideal response?
The supply curve does not exist. The amount a monopolist supplies is the quantity where MR = MC where MR is determined by the shape of the demand curve.
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The multiplier for investment represents the ratio of the change in income to the change in investment spending
Indicate whether the statement is true or false
Diseconomies of scale occur
a. before the optimal scale is reached. b. at the optimal scale of operation. c. after the optimal scale is reached. d. prior to the lowest point of the ATC curve.
Which of the following statements is true?
A) If marginal costs are constant, then it is optimal to advertise until the last dollar spent on advertising generates one additional dollar of sales. B) If the demand curve shifts leftward as the advertising expenditure increases, then the advertising elasticity of demand is positive. C) If the advertising elasticity of demand declines and consumer demand becomes more price elastic, then the optimal advertising-to-sales ratio declines. D) If the advertising elasticity of demand is positive, then the demand curve must be upward sloping.
With respect to monopolies, deadweight loss refers to the
A) socially unproductive amounts of money spent to obtain or acquire a monopoly. B) net loss in consumer and producer surplus due to a monopolist's pricing strategy/policy. C) lost consumer surplus from monopolistic pricing. D) none of the above