Why is price less than marginal revenue for a monopolist?
What will be an ideal response?
Consider the above figure. If the monopolist reduces its price from P1 to P2, its revenues increase by the area of the rectangle bcde. At the same time, however, its revenues decline by the area of the rectangle P1acP2. Marginal revenue is the difference between these two areas, which is less than the price of the one-unit change entailed in increasing output from Q to Q + 1. Thus, marginal revenue is less than price.
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Along the 45° reference line
A) the average propensity to consume is represented. B) planned real expenditures equal real disposable income. C) consumption expenditures equal saving. D) the relationship between consumption and income is represented.
Regression analysis indicates that there are job-related characteristics that may explain some, if not all, of the wage gap between men and women, including hours worked, job tenure, career choice, and choice of college major
Briefly discuss the differences between men and women with respect to these four characteristics.
Demand curves for the services of productive resources
A) have no meaning, because people must have income in order to live. B) obey the law of demand. C) tend to be perfectly elastic in the long run because any resource can ultimately function as a substitute for any other. D) tend to be perfectly inelastic in the short run as long as production processes are determined by technology.
If stocks are more risky than bonds, why would a rational investor ever buy stocks?