A decrease in short-run aggregate supply ________ the equilibrium price level and ________ the equilibrium quantity of real GDP
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
B
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If the absolute price elasticity of demand is 0.2, a 10 percent increase in the price will cause
A) the quantity demanded to decrease by 2 percent. B) the quantity demanded to decrease by 20 percent. C) the quantity demanded to decrease by 5 percent. D) the quantity demanded to decrease by 0.2 percent.
In a competitive industry in the long-run, it is likely that
A. all firms giving their best effort will have the same LAC regardless of location or the unique skills of some workers. B. only one large efficient firm can survive. C. firms with the advantage of location or an especially skilled work crew will be the lone survivors in equilibrium. D. the firms with the poorest location will be the lone survivors in equilibrium because their location cost will be lowest.
A monopolist has the market demand and marginal cost schedules given in the above table. If the monopoly can perfectly price discriminate, what is the profit-maximizing level of output and price?
What will be an ideal response?
Railroads have received significant attention from regulators because
A. railroads enjoy significant economies of scale. B. conditions in the railroad industry are conducive to destructive competition. C. regulators would like to ensure universal service to all potential railroad customers. D. railroads are vulnerable to predatory pricing.