The short-run equilibrium in the aggregate demand–aggregate supply model occurs at the point of intersection of the:
a. short-run aggregate supply curve and the aggregate demand curve.
b. long-run aggregate supply curve and the aggregate demand curve.
c. marginal social cost curve and the aggregate demand curve
d. investment spending curve and the consumption curve.
a
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The fundamental reason a single-price monopoly creates a deadweight loss is that compared to the efficient outcome, the single-price monopoly
A) raises variable cost. B) raises fixed cost. C) restricts output. D) reduces the elasticity of demand.
Darius lent Alejandro $1,000 for one year with the understanding that Alejandro would repay $1,070 . If the actual inflation rate was 7 percent, what was the real rate of interest Darius received?
a. 14 percent b. 7 percent c. 4 percent d. 0 percent e. -7 percent
Suppose you know that at the current level of production average total cost equals marginal cost, then you know that it is also true that:
A. fixed costs are zero. B. average fixed costs are increasing. C. average total cost will decrease if production is increased. D. average total cost is minimized at the current level of output.
Suppose market demand is p = 10 - Q. Firms have a fixed entry cost of 5 and no marginal cost. If firm A is the incumbent, can it deter the entry of its rival, firm B?
What will be an ideal response?