Which of the following is not a difference between monopolies and perfectly competitive markets?
a. Monopolies can earn profits in the long run while perfectly competitive firms break even.
b. Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost.
c. Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not.
d. Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves.
c
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A sales tax imposed on tires ________ consumer surplus and ________ producer surplus
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) does not change; does not change
How can external costs be eliminated by assigning property rights?
What will be an ideal response?
What is the multiplier effect and when do multiplier effects occur?
What will be an ideal response?
A current concern about Social Security is that
A) funds set aside by past generations to pay benefits for future generations are growing too rapidly and may trigger inflation. B) promised benefit payouts are growing more rapidly than likely sources of revenues, indicating a future inability to keep the system operating. C) continued political bickering between the president and Congress could lead to an end to any funding of the program. D) the payroll taxes used to fund the program are being eliminated as part of an effort to generate employment increases, thus leaving the program bankrupt.