A competitive environment penalizes the inefficient use of resources. All but one of the following statements addresses why competition is so important for an efficient outcome. Which statement is not true?
a. Competition drives the price closer to the marginal cost of production.
b. Consolidation leads to concentration of market power that allows providers to act like monopolists and price their products above marginal cost.
c. Competition forces firms to improve efficiency or lose profits.
d. More firms competing in a market means more substitutes, so consumers have more options, and their demand is less elastic.
d. More firms competing in a market means more substitutes, so consumers have more options, and their demand is less elastic.
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Using the table above, if the current market value of the dollar is 125 francs
A) investor A holds dollars, but B and C hold francs. B) investor A holds francs, but B and C hold dollars. C) all three investors hold francs. D) all three investors hold dollars.
If two variables both increase at the same time or decrease at the same time, they are
A) unrelated to each other. B) positively related. C) negatively related. D) conversely related.
Which of the following is a reason why the labor demand curve would shift rightward?
a. A decrease in the amount of capital equipment b. An increase in educational attainment of the population c. A shift to earlier retirement d. An increase in population e. An increase in the number of two-family households
Why would the government create monopoly power by granting a firm a patent that prevents other firms from competing with the patent holder?