For a single-price monopolist,
A) MR = P.
B) MR < P.
C) MR first increases and then decreases with the quantity sold.
D) MR first decreases and then increases with the quantity sold.
B
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A natural monopoly that is regulated to set price equal to marginal cost
A) makes an economic profit. B) makes zero economic profit. C) incurs an economic loss. D) could make an economic loss, an economic profit, or zero economic profit. E) makes zero normal profit.
Promoters for the Rolling Stones were clearly "short selling" when
A) they distributed their latest CD to radio stations free of charge. B) they sold their latest CD to retailers at wholesale prices. C) they sold the world-tour concert tickets weeks in advance. D) they promoted the band without Bill Wyman, the original bass player.
According to the permanent-income hypothesis,
A) the present value of lifetime consumption equals the present value of lifetime income. B) the income earned in a lifetime will be evenly divided between consumption and saving. C) household consumption depends on income that households expect to receive each year, and financial markets are used to smooth consumption in response to changes in transitory income. D) households use financial markets to transfer funds from periods when income is high to periods when income is low.
Within the range of prices around the midpoint on a straight-line demand curve, demand is
A) elastic. B) inelastic. C) unit-elastic. D) zero.