If the marginal cost curve shifts upward, a profit-maximizing, nondiscriminating monopolist is likely to respond in the short run by
a. raising price and increasing output
b. raising price and decreasing output
c. keeping price constant and increasing output
d. reducing price and increasing output
e. shutting down
B
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The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was
A) the high levels of unemployment that occurred during the Great Depression. B) the presence of both high unemployment and high inflation during the 1970s. C) the theoretical proof that classical ideas were invalid. D) the evidence that classical ideas were useful during economic booms, but not during economic recessions.
Which good would you expect to have a greater price elasticity: a gallon of gasoline sold at a specific gasoline station on Main Street in Phoenix, a gallon of gasoline sold in Phoenix, or a gallon of gasoline sold in Arizona? Why?
What will be an ideal response?
Taxing people according to their marginal valuations of a public good may be efficient, but it may not be fair if the ability to pay differs
a. True b. False
Value judgments are based on people’s tastes, preferences, and ethical opinions.
Answer the following statement true (T) or false (F)