Use the figure below to answer the following question.
Refer to the three demand curves. A "decrease in demand" would be illustrated as a change from
A. line C to B.
B. line A to C.
C. point 1 to point 4.
D. point 6 to point 3.
Answer: B
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When the overall level of prices in the economy is increasing, economists say that the economy is experiencing
a. economic growth. b. stagflation. c. inflation. d. deflation.
Other things constant, the quantity of money demanded varies directly with the market interest rate
Indicate whether the statement is true or false
In which of the following scenarios would a predatory pricing scheme have the greatest chance of success, all else constant?
A) The predatory price is set well below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped only over a relatively long period of time. B) The predatory price is set well below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a relatively long period of time. C) The predatory price is set just below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped in a moderate period of time. D) The predatory price is set just below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a very short period of time.
A purely monopolistic firm:
A. has no entry barriers. B. faces a downsloping demand curve. C. produces a product or service for which there are many close substitutes. D. earns only a normal profit in the long run.