An industry in which a few firms make almost all of the market sales is called:
A. a monopsony.
B. a monopoly.
C. an oligopoly.
D. a perfectly competitive market.
Answer: C
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Net entrants to the labor force is likely to be highest when the economy ________
A) is entering a recession B) nears the peak of an expansion C) has passed the peak of an expansion D) begins to recover from a recession
Market failure can result from market outcomes that:
a. result in too few resources devoted to a good. b. result in too many resources devoted to a good. c. may justify government intervention. d. all of these.
A monopolist earns a profit whenever
a. total revenue equals total cost b. marginal revenue equals marginal cost c. price exceeds average variable cost d. marginal revenue is positive e. price exceeds average total cost
A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. Now suppose that the country in which this monopolist is located decides to engage in international trade. The world price of the product produced by the monopolist is $12. The profit-maximizing output level is 6, and the profit-maximizing price equals $12. What are its monopoly profits at this price and quantity?
a. $25 b. $36 c. $50 d. $75