Monopolists can charge any price and sell any amount of output they want because no competition exists.
Answer the following statement true (T) or false (F)
False
Monopolists do not have the ability to charge any price. The price a monopoly can charge is limited by the demand curve, or in other words, consumers' willingness and ability to pay.
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Suppose the equilibrium price in a perfectly competitive industry is $100 and a firm in the industry charges $112 . Which of the following will happen?
a. The firm will not sell any of its output. b. The firm will sell more output than its competitors. c. The firm's profits will increase. d. The firm's revenue will increase. e. The firm will gradually take over the entire industry.
If the economy is near full employment and Congress cuts taxes, the proper monetary policy should be
A. expansionary to keep the economy fully employed. B. expansionary to counteract the increased deficit. C. contractionary to shift the aggregate demand curve outward. D. contractionary to counteract the effects of fiscal policy.
A contestable market is one where:
A. there is a threat of entry. B. there are no firms that threaten to enter the market. C. firms already in the market cannot leave the market. D. only one firm at a time can serve the market.
Bonnie volunteers to help make floral arrangements at a flower shop. She is an example of
A) entrepreneurial ability. B) labor. C) physical capital. D) human capital.