To maximize profits, the firm in Figure 10.3 will charge:
A. P1.
B. P2.
C. P3.
D. P4.
Answer: C
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Ceteris paribus, if the market demand for a product decreases, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____
a. increase; increase b. indeterminate; decrease c. indeterminate; increase d. decrease; decrease
If the demand curve is perfectly elastic, then an increase in supply will: a. increase both the price and the quantity exchanged
b. increase the price but result in no change in the quantity exchanged. c. increase the quantity exchanged but result in no change in the price. d. decrease the price but result in no change in the quantity exchanged.
A decrease in aggregate supply will cause the price level to
a. rise and real GDP to fall b. rise and real GDP to rise c. rise and the unemployment rate to fall d. fall and real GDP to rise e. fall and the unemployment rate to rise
In which market structures does a firm have at least some ability to set the market price?
A) perfect competition and monopolistic competition B) monopolistic competition and oligopoly C) oligopoly and monopoly D) monopolistic competition, oligopoly and monopoly