Discuss and explain the relationships between the monopolist's demand curve, average revenue curve, and marginal revenue curve
What will be an ideal response?
The monopolist's demand curve is the industry demand curve, and it is downward sloping. Total revenue is PQ, so average revenue is PQ/Q = P. Thus, the average revenue curve is the demand curve. The marginal revenue curve lies below the demand curve. If a firm sells another unit, it receives the price for the unit. But, it must reduce price to make the sale, and hence must lower price on other units it could have sold at a higher price. Consequently, the extra revenue earned from selling an extra unit is less than the price.
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A) free markets. B) international trade. C) economic growth potential. D) employment. E) protection of property rights.
If markets are perfectly competitive, then the production of goods
A) will use the least costly combination of resources. B) will occur at an average total cost value that is above the minimum. C) will require government intervention. D) will always lead to business failures.
Import quotas are aimed at increasing the quality of domestic products
a. True b. False Indicate whether the statement is true or false
Which of the following statements is true about profit-related income? a. It results from hiring workers below the marginal contributions they make to the enterprise
b. It consists of rents derived from the sole ownership of capital. c. It is the reward for undertaking the uncertainties of enterpreneurship. d. It equals the entrepreneur's opportunity costs of labor and money capital. e. It is the same as wage-related rents, except it is the entrepreneur who gets it.