In a perfectly competitive market, the demand curve faced by an individual firm is:
A. perfectly elastic.
B. perfectly inelastic.
C. relatively elastic.
D. relatively inelastic.
Answer: A
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A monopolist, unlike a perfect competitor, has total control in its market because it is the single producer. Why, then, must a single-price monopolist decrease its price if it wants to increase its output?
What will be an ideal response?
”Peak” pricing can best be defined as
A. setting higher prices to reflect higher demand. B. pricing to obtain maximum profit. C. setting price higher when demand is more elastic. D. raising price to determine elasticity.
Investments that are mistakenly made and generate losses
a. will occur when future revenues are known with certainty. b. indicate that the capital market is incapable of generating wealth. c. are normal costs of developing new projects and technologies in a world of uncertainty. d. will not occur when capital markets are operating efficiently.
The tendency of many different economic variables to have regular and predictable patterns over the business cycle is called
A. comovement. B. recurrence. C. periodicity. D. persistence.