Describe the economic case against monopoly
What will be an ideal response?
Monopoly will be economically inefficient in the allocation of resources because monopolistic firms will restrict output and charge prices that would not be the case if the industries were competitive. The monopolist maximizes profit by equating marginal revenue with marginal costs. In this case, product price is greater than marginal cost, so there is an under allocation of resources to the production of the product. In a competitive industry, price is equal to marginal cost, so society cannot gain by producing one unit more or one unit less of output.
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Use the following graph of the demand for electric cars to answer the question below.
Which of the following would occur if electric cars became less expensive?
A. D3 to D1 B. Point a to point b C. Point b to point A D. D2 to D1
The value of the x-coordinate of a point in a graph is the length of a line from the point to the
A) origin. B) scalar. C) x-axis. D) y-axis.
In answer to the question "How did Britain affect American economic growth?" Hughes and Cain (2011) reach what conclusion?
(a) The colonies were launched with English institutions, and they were allowed to modify them to meet local needs. In exchange for their investment in the colonies, the British expected the American colonies to produce and grow rapidly. (b) British policies were adverse to the colonies because they interfered with efforts to recruit a labor force and maintain employment at something close to full employment. (c) British policies prevented the colonies from going through an Industrial Revolution, as was occurring in England. (d) British policies significantly held down income growth in the colonies because they aimed at increasing the proportion of "primary" output at the expense of commercial and manufacturing output.
A temporary decrease in the price of oil would be considered a:
A. long-run supply shock. B. demand shock. C. short-run supply shock. D. The changing price of oil would not affect any of these.