If antitrust legislation is successful, then the monopolistic firm will
A) decrease output and charge a lower price than before.
B) increase output and charge a higher price than before.
C) increase output and charge a lower price than before.
D) decrease output and charge a higher price than before.
Answer: C
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When a country's ability to maintain its fixed exchange rate is doubted by investors:
A. it may fall under a speculative attack. B. the exchange rate is likely to spiral upward, out of control. C. the value of its currency tends to appreciate too quickly. D. All of these statements are true.
Assume that the demand for paper products increases. Then, we expect that the
a. demand for trees will also increase. b. demand for trees will stay the same. c. demand for trees will decrease. d. effect on the demand for trees is uncertain; it depends on the elasticity of the demand for paper.
When the perfectly competitive firm maximizes profits the price of its product always equals
A. average revenue. B. marginal costs. C. marginal revenue. D. All of the choices are correct
When the interest rate on newly issued bonds increases, the price of existing bonds:
A. decreases. B. may either increase or decrease. C. increases. D. increases only if the coupon rate is below the new rate.