Suppose a monopolist is at the profit-maximizing output level. If the monopolist reduces output:
A. both producer surplus and consumer surplus decrease.
B. producer surplus rises but consumer surplus falls.
C. producer surplus falls but consumer surplus rises.
D. both producer surplus and consumer surplus increase.
Answer: A
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Which does NOT cause an industry that might otherwise be competitive to tend toward oligopoly?
A) economies of scale B) barriers to entry C) mergers D) strategic independence
According to Freidman and Schwartz, the most important structural change in the banking system to result from the 1933 panic:
a. were laws barring short calls on equities. b. was Federal insurance of bank deposits. c. was an unprecedented increase in regulation. d. was the loss of public confidence.
Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:
A) an increase in the demand for potatoes. B) an increase in the quantity of potatoes demanded. C) a decrease in the demand for potatoes. D) no change in the demand for potatoes.
Refer to the information provided in Figure 1.4 below to answer the question(s) that follow.
Figure 1.4Refer to Figure 1.4. At Point E in Panel A, the slope is
A. zero. B. infinite. C. negative. D. indeterminate from this information.