The non-discriminating pure monopolist must decrease price on all units of a product sold in order to sell more units. This explains why:
A. There are barriers to entry in pure monopoly
B. A monopoly has a perfectly elastic demand curve
C. Marginal revenue is less than average revenue
D. Total revenues are greater than total costs at the profit maximizing level of output
C. Marginal revenue is less than average revenue
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In the market depicted in the above figure, if a single-price monopoly maximizes its profit, which area shows the consumer surplus?
A) area GHIL B) area HIJ C) area HJKG D) area NFL
Which pair of goods is most likely to have a negative cross-price elasticity?
A. All cross-price elasticities are negative, but often reported in absolute value. B. Peanut butter and jelly. C. Butter and margarine. D. Milk and pencils.
Industry A has market shares of 50, 30, and 20 . Industry B has market shares of 45, 40, and 15 . where si is the market shares of the i-th firm in the industry
a. The Herfindahl index for A is 100. b. The Herfindahl index for A is 3,800. c. The Herfindahl index for B is 3,600 d. The Herfindahl index for A is greater than for B. e. The Herfindahl index is for B is 4,000.
According to the Keynesian view, capitalism
a. is a highly productive form of economic organization that works best when government intervention is least. b. experiences booms and busts because of the instability of private investment that is driven by fickle changes in business optimism. c. experiences booms and busts that are primarily the result of inappropriate monetary policy. d. experiences fluctuations in aggregate demand that cannot be controlled with fiscal policy.