The above figure shows the demand and cost curves facing a monopoly. The monopoly maximizes profit by setting price equal to
A) $100.
B) $200.
C) $300.
D) $400.
C
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Real income is ________
A) equal to money income minus taxes B) equal to the income earned legally C) equal to money income plus benefits minus taxes D) the maximum amount of goods and services that a household can afford
Government failure, when government actions lead to inefficiency, can result in
A) overprovision. B) underprovision. C) both A and B. D) neither A nor B.
Assume the Treasury borrows $5 billion from the non-bank public and spends it
The effect on bank reserves is that they will __________ by $5 billion when the Treasury borrows and then bank reserves will __________ by $5 billion when the Treasury spends the money. A) rise; fall B) fall; rise C) rise; rise D) fall; fall