The price elasticity of demand for a monopolist
A) is infinite since the monopolist is the only firm in the market.
B) decreases as more competition occurs in the market.
C) increases as similar products enter the market.
D) is undefined due to the lack of competition.
Answer: C
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What is measured on the horizontal axis of the aggregate demand/aggregate supply model?
A) real wealth B) real Gross Domestic Product (GDP) C) prices D) nominal income
What is the difference between foreign direct investment and foreign portfolio investment?
A) Foreign direct investment involves purchases of foreign stock or bonds by individuals or firms, while foreign portfolio investment involves a firm purchasing or building a facility in a foreign country. B) Individuals engage in foreign portfolio investment, but only firms can engage in foreign direct investment. C) Foreign direct investment can give a low-income country access to funds and technology it would not otherwise have, but foreign portfolio investment does not expand that access. D) Foreign direct investment only takes place when governments make official purchases or foreign investments, while foreign portfolio investment takes place when firms, individuals, or the government purchase foreign investments.
Four companies dominate the market for robotic lawn mowers. Each company takes a different action. Which action is most likely to present a barrier to potential entrants to the industry?
a. Firm A obtains a patent on the technology it uses in its robots. b. Firm B discovers a cost-saving process that also speeds production. c. Firm C becomes the price leader in the industry and raises its prices. d. Firm D uses game theory strategies to predict the actions of its rivals.
An independent variable can be included in a regression model:?
A. ?when it affects y and is uncorrelated with all of the independent variables of interest. B. ?when it does not affect y and is uncorrelated with all of the independent variables of interest. C. ?when it affects y and is correlated with all of the independent variables of interest. D. ?when it does not affect y and is correlated with all of the independent variables of interest.