A local electricity-generating company has a monopoly that is protected by an entry barrier that takes the form of
A) control of a key raw material.
B) network externalities.
C) economies of scale.
D) a perfectly inelastic demand curve.
Answer: C
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The conflict between the Vice President of Marketing and her sales staff arises because
a. the sales staff are too willing to offer discounts b. the sales staff does not want to negotiate aggressively enough c. the Vice President wants to negotiate too aggressively d. the Vice President is more willing to offer discounts to make the sale
Suppose two economists disagree about who would be helped or hurt by certain legislation. These disagreements
a. are positive in nature b. are minor and rarely lead to different policies or conclusions c. are normative in nature d. occur as the result of a mistake made by an economist e. occur because economic models are more complex, and subject to error, than the real world
Under perfect competition, if some firms are taking losses in the short run, in the long run
A. equilibrium price will rise until all firms are earning zero economic profits. B. those firms will cut back their output until they get to the level at which marginal cost equals price. C. firms will leave the industry until all firms are making a profit. D. those firms will earn losses until demand increases.
A monopolist's demand curve:
A) is the same as the market demand curve. B) is perfectly inelastic. C) is perfectly elastic. D) is the same as the marginal revenue curve.