Which of the following statements is correct?
a. Firms with some degree of monopoly power are common, but firms with substantial monopoly power are rare.
b. Firms with some degree of monopoly power are rare, as are firms with substantial monopoly power.
c. Firms with some degree of monopoly power are common, as are firms with substantial monopoly power.
d. Firms with some degree of monopoly power are rare, but firms with substantial monopoly power are common.
a
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Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that labor is the only input that varies for the firm. If the firm pays a wage of $700 per week and the marginal product of labor equals 35 units per week, then the marginal cost of producing an additional unit of output is
a. $20. b. $35. c. $700. d. We do not have enough information to answer this question.
Marginal product is defined as the change in ________ resulting from a one-unit increase in ________.
A. total product; input B. total product; output C. output; total product D. total cost; output
Refer to the graphs shown. The relevant market is corn. The impact of a poor corn harvest on the market for corn would most likely be demonstrated by which graph?
A. Graph a B. Graph b C. Graph c D. Graph d
The simple multiplier formula assumes the following, except that
A. the economy has excess capacity and room to expand output. B. firms will raise prices as buyers buy more of their output. C. business firms will increase production if demand for their output increases. D. people will spend more if they earn additional income.