In perfect competition, innovation is a means for a firm to
a. exit the market
b. establish brand loyalty
c. shift the ATC and MC curves upward
d. generate short-run economic profit
e. shift the market supply to the left
D
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A movie monopolist sells to students and adults. The demand function for students is QdS = 600 - 100P and the demand function for adults is QdA = 1,200 - 100P. The marginal cost is $2 per ticket. Suppose the movie theater can price discriminate. What is the monopolist's profit from students?
A. $400 B. $2400 C. $2500 D. $0
During economic slowdowns (recessions) the velocity of money tends to:
A. increase dramatically. B. increase slightly. C. decrease. D. remain relatively stable.
If we say that a price is too high to clear the market, we mean that:
A. quantity demanded exceeds quantity supplied. B. the equilibrium price is above the current price. C. quantity supplied exceeds quantity demanded. D. the price of the good is likely to rise.
With respect to consumer behavior, the interest-rate channel of monetary policy transmission appears to be:
A. strong because people's decisions to purchase cars or houses depend on the short-term rates that policymakers can change. B. strong because it affects both spending and saving decisions. C. weak because people's decisions to purchase cars or houses depend more on short-term rates rather than long-term rates. D. weak because people's decisions to purchase cars or houses depend more on long-term rates rather than short-term rates.