Discuss and explain the relationships between the monopolist's demand curve, average revenue curve, and marginal revenue curve
What will be an ideal response?
The monopolist's demand curve is the industry demand curve, and it is downward sloping. Total revenue is PQ, so average revenue is PQ/Q = P. Thus, the average revenue curve is the demand curve. The marginal revenue curve lies below the demand curve. If a firm sells another unit, it receives the price for the unit. But, it must reduce price to make the sale, and hence must lower price on other units it could have sold at a higher price. Consequently, the extra revenue earned from selling an extra unit is less than the price.
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When nominal interest rates are high, the velocity of money should:
A. not change; the velocity of money does not vary with the interest rate. B. decrease by the same percent that the nominal interest rate has increased. C. also be high. D. be low.
The basic factors of production include
A. Land, labor, money, and inputs. B. Land, labor, capital, and entrepreneurship. C. Labor and money. D. Land, labor, money, and capital.
All of the following can be used to increase monopoly power except
A. Antitrust laws. B. Discounts for customer loyalty. C. Acquisitions. D. Lawsuits.
A person has a comparative advantage in the production of a good when they can produce the product at a(n) ________ opportunity cost compared to another person
Fill in the blank(s) with the appropriate word(s).