Conclusions about the misallocation of resources under conditions of monopoly depend, in part, on the crucial assumption that
A) monopolies are interested in economic profits and competitive firms are not.
B) the monopolization of a perfectly competitive industry does not change the cost structure of the industry.
C) the economies of scale exist only in perfectly competitive industries.
D) the marginal cost curve of a monopolist is different from that of a perfectly competitive firm.
B
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If average fixed cost exceeds average variable cost, a firm should shut down in the short run
a. True b. False
Suppose a previously competitive labor market turns into a monopsony. The labor supply curve faced by the new monopsonist is
a. above the labor supply curve under perfect competition b. the market supply curve of labor c. below the labor supply curve under perfect competition d. changed because workers are now more willing to supply labor e. perfectly horizontal
If the supply of a good is relatively inelastic, this means that the quantity supplied of the good is
a. not very sensitive to the price of the good. b. highly sensitive to the price of the good. c. unrelated to the price of the good. d. none of the above.
A horizontal merger involves
a. two companies in the same line of business joining together b. a buyer's expanding operations forward toward the final customer c. a buyer's expanding operations backward toward the source of raw material d. companies in unrelated lines of business coming together e. b and c