Under what circumstances would a monopolist price be as low as the price that would prevail in a perfectly competitive market?
What will be an ideal response?
If a market is perfectly contestable, existing firms in the market will earn only zero economic profits, irrespective of the number of firms.
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Suppose we observe that the price of gasoline has been rising, even though the quantity of gasoline sold has been falling. We can conclude that
a. the law of supply does not hold for gasoline. b. the law of demand does not hold for gasoline. c. the demand for gasoline must have fallen. d. the supply of gasoline must have fallen.
All of the following lead to more rapid economic growth EXCEPT
A) restricting international trade. B) encouraging higher rates of saving. C) supporting more research and development. D) encouraging higher quality education.
Using the quantity equation, the demand for money can be expressed as
A) M=(V x Y)÷P. B) M =(P x Y)÷V. C) M = (P x V) ÷ Y. D) M x V=(1/P)V x Y.
Which statement is false?
A. Most jobs in defense plants during World War II were held by white males. B. The federal government instituted wage and price controls during World War II. C. Very little new housing was built during the Great Depression and World War II. D. None of the statements are false.