As the definition of products narrows (i.e., becomes more specific), the concentration ratio
A) is not valid.
B) tends to decrease.
C) tends to increase.
D) does not change in any predictable manner.
Answer: C
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Which of the following Fed actions would increase the level of total bank reserves?
a. buying securities from individuals or businesses b. selling securities to commercial banks c. reducing reserve requirements d. raising the discount rate
One answer to the problem of natural monopoly is provision of the good by a government-owned and operated firm. Why is that option not used very often?
In a Cournot oligopoly with N firms and identical marginal costs, the relationship between the price elasticity of market demand and that of the firm is:
A. No deterministic relationship. B. EM = EF. C. EM = EF/N. D. EM = NEF.
See Figure 19.1. Lu's consumer surplus is equal to
A. $500. B. $300. C. $100. D. $200.