A single-price monopoly will set its price according to which of the following rules?
A) P = MR and MR = MC
B) P = MC where the MC curve crosses the demand curve
C) P = MR where the MR curve crosses the demand curve
D) None of the above answers is correct.
D
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Banks in Richland charge an interest rate of 4% for overnight loans to each other. How will this rate change if the central bank of Richland engages in open market operations to purchase bonds?
What will be an ideal response?
Suppose a single-input production function has initially increasing but eventually decreasing marginal product. In this case, the first order condition for the profit maximization problem
A. is necessary for identifying the profit maximizing production plan. B. is sufficient for identifying the profit maximizing production plan. C. is both necessary and sufficient for identifying the profit maximizing production plan. D. is neither necessary nor sufficient for identifying the profit maximizing production plan.
Policymakers' attempts to use the Phillips curve to reduce the unemployment rate below the natural rate
A) will be successful since the Phillips curve shows the relationship between the inflation rate and the unemployment rate. B) will be successful if monetary policy is used. C) will be unsuccessful if monetary policy is used since monetary policy leads to higher prices. D) will be unsuccessful since workers' expectations adjust to attempts to reduce unemployment below the natural rate.
Efficiency is related to the size of the economic pie, whereas equality is related to how the pie gets sliced and distributed
a. True b. False Indicate whether the statement is true or false