The revenue curves that a monopoly faces are different from those that a perfectly competitive firm faces in that the:
A. average revenue curve is no longer equal to price.
B. total revenue curve for a monopoly is linear.
C. marginal revenue curve is downward sloping instead of flat.
D. marginal revenue curve is now flat instead of downward sloping.
Answer: C
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If, as some economists believe, changes in technology over recent decades have brought about changes in labor markets, then those changes likely have resulted in
a. reduced emphasis on compensating differentials as an explanation for wage differences. b. a reduced emphasis on human-capital differences among workers as an explanation for wage differences. c. a narrowing of the earnings gap between high-skilled workers and low-skilled workers. d. a widening of the earnings gap between high-skilled workers and low-skilled workers.
A bond is
A) a legal claim to a part of a corporation's future profits that includes voting rights. B) a legal claim to a part of a corporation's future profits that does not include voting rights. C) a legal claim against a firm, providing a fixed annual coupon payment and a lump-sum payment at maturity. D) a nonlegal promise to provide an annual payment to the holder when the corporation makes profits.
Demand is inelastic if
A. the percentage change in quantity demanded is greater than the percentage change in price. B. the elasticity of demand is less than 1. C. the demand for the good is sensitive to changes in price. D. more units will be purchased if the price increases.
The demand for a good is elastic. Which of the following would be the most likely explanation for this?
A. The time interval considered is long. B. The good costs a small portion of one's total income. C. The good is broadly defined. D. The good is a necessity.