Refer to the scenario above. If both firms operate without government intervention:
A) total costs are maximized.
B) total profits are maximized.
C) marginal revenues of both the firms are maximized.
D) marginal revenues of both the firms are minimized.
B
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In the figure above, the single-price, unregulated monopoly sets a price of
A) $80 per unit. B) $60 per unit. C) $40 per unit. D) $0 per unit.
Bill lives in Montana and likes to grow zucchini. He applies fertilizer to his crops twice during the growing season and notices that the second layer of fertilizer increases his crop, but not as much as the first layer. What economic concept best explains this observation?
a. The law of diminishing marginal utility. b. The law of diminishing returns. c. Return equalization principle. d. The principal-agent problem.
Politicians will often be able to gain from support of trade restrictions because
A) the restrictions will lead to lower prices and substantial benefits for consumer groups. B) the restrictions will generate substantial benefits for consumer groups at the expense of well-organized labor and industrial interests. C) organized interest groups benefiting from the restrictions will make large contributions to political campaigns while most others will not feel strongly about the restrictions. D) foreigners benefiting from the restrictions will be a major source of political contributions.
As new firms enter a monopolistically competitive industry where profits are being made
A. the demand curve facing each firm decreases, thereby reducing prices and profits. B. the market demand curve for the product decreases, thereby reducing prices and profits. C. the demand curve facing each firm increases, thereby increasing prices and profits. D. the market demand curve for the product increases, thereby increasing prices and profits.