A monopolist may choose a price lower than the profit maximizing price because?
a. its costs curves are not the most efficient in the market
b. it wants to prevent the government from deciding to regulate the monopoly
c. the market prefers a lower price
d. it want to encourage potential competitors to enter the market
Answer: b. it wants to prevent the government from deciding to regulate the monopoly
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"In the classical model, the equilibrium level of real Gross Domestic Product (GDP) is completely supply-determined." Do you agree or disagree? Why?
What will be an ideal response?
The Case in Point on obesity suggests that food prices are lower because of:
A) an increase in the in the demand for food only. B) an increase in the supply of food only. C) an increase in the demand for food was less than the increase in the supply of food. D) an increase in the supply of food that was less than the increase in demand for food.
Under perfect competition
A. many firms produce differentiated products. B. prices are determined by the market and there are no price makers. C. a few firms have an influence over price. D. None of the choices are correct under perfect competition.
Which of the following does not take place in the direct finance market?
A) Ownership in corporations is sold in the form of common stock. B) Deposits from savers are accumulated and loans made to borrowers. C) Ownership in corporations is sold in the form of preferred stock. D) Corporate bonds are sold to savers.