Why is there a supply curve in pure competition but no supply curve in pure monopoly?
What will be an ideal response?
A purely competitive firm has a supply curve that is the portion of the marginal cost curve above average variable cost. Under pure competition, price equals marginal revenue. Output is determined where price (marginal revenue) equals marginal cost. As the price rises above minimum average variable cost, output will increase. In this case, there is a unique relationship between price and quantity supplied.
The monopolist has no supply curve because there is no unique relationship between price and output (quantity supplied). Price and output will change when demand and marginal revenue change. Under pure monopoly, price does not equal marginal revenue as is the case in pure competition. The pure monopolist sets output where marginal revenue equals marginal cost, but there can be different prices associated with this level of output because of changes in demand and marginal revenue.
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Government spending plays no role in meeting our social and public needs.
Answer the following statement true (T) or false (F)
When industrial activity increases,
A) GDP decreases because of pollution. B) pollution does not necessarily increase. C) health and life expectancy decrease. D) and real GDP increases, it is the case that in all nations fewer resources are devoted to protecting the environment. E) the increase in real GDP is partially offset by the increase in pollution.
The ability to produce a good or service at a lower opportunity cost than other producers incur is known as
a. absolute advantage. b. comparative advantage. c. comparative specialization. d. absolute specialization.
Why is the change in reserve requirement not frequently used to control the supply of money?