The price elasticity of demand for a good produced by a monopolist
A) equals zero as long as the good has no close substitutes.
B) is always inelastic since the demand curve slopes down.
C) does not equal zero because there will always be some substitutes, however imperfect they may be.
D) does not equal zero because every good has at least one good substitute for it.
Answer: C
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The multiplier effect following an increase in expenditure is generated by induced increases in consumption expenditure as income rises
Indicate whether the statement is true or false
The direct impact of contractionary monetary policy is to:
A. lower U.S. income, reduce U.S. imports, and lower the value of the dollar. B. raise U.S. income, increase U.S. imports, and raise the value of the dollar. C. raise U.S. income, increase U.S. imports, and lower the value of the dollar. D. lower U.S. income, reduce U.S. imports, and raise the value of the dollar.
The increase in bank supervision in the United States in the 1980s and early 1990s was due to an increase in bank
A. profits. B. ownership of common stocks. C. failures. D. deposits and loans.
Recall the Application about low-price guarantees and the prices of tires to answer the following question(s).Recall the Application. A study of the retail tire market suggests that prices are ________ in markets where firms offer low-price guarantees.
A. generally higher B. generally lower C. always lower D. generally unchanged