Suppose a monopolist reduces its price in an effort to expand output. If the price effect equals the quantity effect, then the marginal revenue will be zero.
a. true
b. false
a. true
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Productive efficiency does not hold for a profit-maximizing, monopolistically competitive firm in the long-run equilibrium because the firm operates along the diseconomies-of-scale region of its average total cost curve
Indicate whether the statement is true or false
Which of the following would lead to an increase in the demand for computer software?
a. A decrease in the price of computer software. b. A decrease in the price of personal computers. c. An decrease in the cost of producing computer software. d. An decrease in personal income.
If a firm is operating at a loss in the short run and finds that its price is greater than average variable cost, then in the short run
a. it should produce where MR = MC b. it should produce zero output c. it should go out of business d. total revenue is less than total variable costs e. total revenue is greater than total costs
During 1979-2005, the mortgage default rate
a. was less than the foreclosure rate. b. soared to more than 5 percent during recessions but declined sharply during economic expansions. c. soared to more than 5 percent during expansions but declined sharply during economic recessions. d. was generally between 1 and 2 percent.