Suppose a perfectly competitive market results in a long-run equilibrium price of $8 and quantity of 500. If this same market were a monopoly, which of the following price and quantity combinations would be the most likely?
A. Price: $10, Quantity: 350
B. Price: $8, Quantity: 500
C. Price: $6, Quantity: 650
D. Price will equal marginal revenue and quantity will be found where marginal revenue equals marginal cost.
Answer: A
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A) has a positive slope. B) has a negative slope. C) is horizontal. D) is vertical. E) is concave.
The reserve ratio is 20 percent. After the Fed buys $1 million in U.S. government securities from a bond dealer by transmitting the funds to the dealer?s deposit account at Bank A, Bank A lends a construction company an amount equal to its excess reserves. The construction company spends the entire amount on lumber from a lumber yard, which deposits the construction company?s check in its deposit account with Bank A. The maximum loan Bank A can now make is
A) $0. B) $640,000. C) $800,000. D) $1 million.
Knowing the number of firms in a market is the only information needed to identify the structure of that market
a. True b. False
Monopolists in the labor market equate the marginal wage with the marginal revenue product to find the desired level of employment for a union.
Answer the following statement true (T) or false (F)