A monopolist's demand curve is
A) perfectly elastic.
B) perfectly inelastic.
C) of unit elasticity throughout.
D) the industry demand curve.
D
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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
What role do firms play in output markets? What role do firms play in factor markets?
What will be an ideal response?
In a basic model of wage and employment determination with a monopoly union, the monopoly union stipulates the wage. The firm then responds by choosing an employment level that maximizes
A. profit. B. the wage. C. strike duration. D. output. E. labor costs.
Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. According to the capture theory, we would expect
A) prices to increase by a little immediately and profits to decrease by a lot. B) there will be some increase in price but not immediately. C) no increase in price. D) a quick increase in price maintains profits in the industry.