What are the consequences of a firm exercising monopoly power?
A. Higher price and larger quantity sold.
B. Higher price and smaller quantity sold.
C. Lower price and larger quantity sold.
D. Lower price and smaller quantity sold.
Ans: B. Higher price and smaller quantity sold.
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Suppose that a consumer is at an optimum consuming X and Y. If the price of X falls, then to get to a new equilibrium the consumer must
A) purchase less X and more Y. B) purchase less Y and less X. C) purchase more X. D) purchase more Y.
If the elasticity of demand were positive what would this imply about the shape of the demandcurve? Why is it that we are unlikely to find a price elasticity of demand with a positive value?
What will be an ideal response?
Which of the following is one of the widely-acknowledged problems with the consumer price index (CPI) as a measure of the cost of living?
What will be an ideal response?
Figure 10-9
Figure 10-9 illustrates a period of
a.
economic growth and high inflation.
b.
economic growth and low inflation.
c.
economic recession and high inflation.
d.
economic recession and low inflation.