Monopoly power results from the ability to
A) set price equal to marginal cost.
B) equate marginal cost to marginal revenue.
C) set price above average variable cost.
D) set price above marginal cost.
D
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Which of the following is not a factor which would be relevant to country risk analysis?
A) political uncertainty B) external debt C) economic growth D) none of the above.
Banks prefer __________ hold excess reserves because __________
A) not to; excess reserves earn no interest B) not to; banks are not required to hold them C) to; excess reserves earn interest D) to; banks need them to prevent runs
Which of the following statements is correct regarding a tax on a good and the resulting deadweight loss?
a. The greater are the price elasticities of supply and demand, the greater is the deadweight loss. b. The greater is the price elasticity of supply and the smaller is the price elasticity of demand, the greater is the deadweight loss. c. The smaller are the decreases in quantity demanded and quantity supplied, the greater the deadweight loss. d. The smaller is the wedge between the effective price to sellers and the effective price to buyers, the greater is the deadweight loss.
Agencies exist which rate bonds based on characteristics of the borrower. Such bond rating agencies are an example of a financial market response designed to:
A. transfer risk from the buyer to the rating agency. B. decrease the real return to bondholders. C. provide a lower cost solution to the high cost of information. D. increase information asymmetry.