In the long run if some firms are losing money in monopolistic competition
A. the industry supply curve will increase and market price will fall.
B. the industry supply curve will increase and market price will rise.
C. the industry supply curve will decrease and market price will fall.
D. the industry supply curve will decrease and market price will rise.
D. the industry supply curve will decrease and market price will rise.
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An increase in government expenditures by $100 (unmatched by an increase in taxes) would, if the MPC = 0.9, result in an increase in national income by
a. $1,000 b. $9,000 c. $900 d. $190 e. inadequate information is given
Figure 4-9
Refer to . The market for gasoline was initially in equilibrium at point b. If a $.40 excise tax was imposed,
a.
the supply of gasoline would shift to S2.
b.
the price of gasoline to consumers would increase from $1.20 per gallon to $1.40 per gallon.
c.
the net price received by producers of gasoline would decline from $1.20 per gallon to $1.00 per gallon.
d.
all of the above would occur.
Suppose that two firms are producers of spring water, which can be obtained at zero cost. The market demand curve for their combined output is p = 100 - Q where p is the price and Q is the amount of spring water sold by both together. If the two producers act in accord with the Cournot model, their combined output will be
A. 66.66. B. 0. C. 50. D. 33.33.
If a regulatory commission wants to provide a natural monopoly with a fair return, it should establish a price that is equal to:
A. minimum average fixed cost. B. average total cost. C. marginal cost. D. marginal revenue.