A monopoly industry:
a. has very significant barriers to entry
b. faces a downward sloping demand curve.
c. may earn economic profits or losses in the short run.
d. has all of the above characteristics.
d
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Answer the following statement(s) true (T) or false (F)
1. A negligence standard, with the allowance of contributory negligence, always leads to a socially optimal outcome. 2. Strict liability is the liability that exists when it can be proven beyond a reasonable doubt that the defendant was negligent. 3. Negligence is irrelevant when a strict liability standard is applied. 4. The principle of general average gives a ship's captain an incentive to consider the value of cargo when jettisoning it to prevent a disaster. 5. The doctrine of Respondent Superior contends that an employer is sheltered from torts committed against his employees.
If macaroni and cheese is an inferior good, an increase in income will
A) not affect the demand for macaroni and cheese. B) decrease the demand for macaroni and cheese. C) increase the demand for macaroni and cheese. D) create no income effect.
Consider the following methods of taxing a corporation's income:
a. A flat tax, as opposed to a progressive tax, is levied on corporate profits. b. A system whereby a corporation calculates its annual profit and notifies each shareholder of her portion of the profits. The shareholder would then be required to include this amount as taxable income for her personal income tax. The corporation does not pay a tax. c. A system where the federal government continues to tax corporate income through the corporate income tax but allows individual taxpayers to receive, tax free, corporate dividends and capital gains. Which of the methods above would avoid double taxation? A) a, b, and c B) a and b only C) a and c only D) b and c only
An individual whose attitude toward risk is illustrated in Figure 5.1 is
A) risk averse. B) risk loving. C) risk neutral. D) None of the above is necessarily correct.