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Assume that Figure 4-4 shows demand for new houses. A decrease in income of buyers will change demand from
A. D1to D2
B. D2to D1.
C. D2to D3.
D. D1to D3.
Answer: B
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One difference between perfectly competitive markets and single-price monopoly markets is that
A) marginal revenue equals marginal cost for perfectly competitive firms, but not for monopolists. B) marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists. C) marginal cost equals average variable cost for perfectly competitive firms but not for monopolists. D) All the above answers are correct.
Financial markets quickly eliminate unexploited profit opportunities through changes in
A) dividend payments. B) tax laws. C) asset prices. D) monetary policy.
To maximize sales revenue, an oligopolist will expand output until the marginal revenue curve cuts the horizontal axis
a. True b. False Indicate whether the statement is true or false
When new firms have an incentive to enter a competitive price-taker market, their entry will
a. increase the price of the product. b. drive down profits of existing firms in the market. c. shift the market supply curve to the left. d. increase demand for the product.