In the long run, profit-maximizing monopolists facing a downward-sloping demand curve
A. may earn profits greater than their opportunity costs of capital.
B. do not produce every possible unit of output for which marginal utility is greater than or equal to marginal cost.
C. may or may not have lower costs than perfectly competitive firms in the same industry.
D. All of these responses are correct.
Answer: D
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In the short run ________
A) the more flexible wages and prices are, the more inflation responds to the output gap B) the more sticky wages and prices are, the more difficult to tell the difference between the short run and long run aggregate supply curves C) if wages and prices are sticky, aggregate output is always at its potential level D) all of the above E) none of the above
During 1979-2005, the mortgage default rate
a. was less than the foreclosure rate. b. soared to more than 5 percent during recessions but declined sharply during economic expansions. c. soared to more than 5 percent during expansions but declined sharply during economic recessions. d. was generally between 1 and 2 percent.
As price rises, quantity supplied
A. rises. B. falls. C. remains the same.
A good goes through three stages of production. The value added at stage 1 is $3; the value added at stage 2 is $5; the value added at stage 3 is $1. What is the retail price of the good?
A. $6 B. $9 C. $10 D. Cannot be determined based on the information given.