Because a monopolist has no incentive to control costs under a policy of average-cost pricing, we can expect:
A. price to increase over time as costs rise.
B. price to fall over time as costs rise.
C. profits to increase over time as costs rise.
D. profits to decrease over time as costs rise.
Answer: A
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Nominal GDP increases
A) only if total production increases. B) only if prices increase. C) if either prices and/or total production increase. D) only if the productivity of resources increase. E) only if depreciation decreases.
Which of the following equations illustrates the equilibrium level of income with respect to the simple Keynesian closed-economy model?
a. Y = [1/(1 ? b)](a ? bT ? I + G) b. Y = [1/(1 ? b)](a + bT + I + G) c. Y = [1/(1 + b)](a ? bT ? I ? G) d. Y = [1/(1 ? b)](a ? bT + I + G) e. Y = (1 ? b)(a + bT + I + G)
The total accumulated debt of the federal government due to deficit spending is called the:
a. federal deficit. b. Congressional debt. c. deficit debt ceiling. d. national debt.
A beneficial supply shock that has a prolonged impact on the economy permanently increases output and lowers prices
Indicate whether the statement is true or false