Advertising by the monopolist
a. is not done because the monopolist has the only supply of the product and doesn't need to advertise.
b. would have the effect of shifting its demand curve to the left.
c. may lead to expanded production by the monopolist.
d. makes no sense because there are no substitute commodities available to consumers.
c
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An insured person's incentive to behave in ways that raise the probability of a claim is known as:
a. a moral hazard. b. the lemons problem. c. the problem of adverse selection. d. the problem of advantageous selection.
The difference between Gross National Product and Net National Product is the
a. rate of inflation. b. statistical discrepancy encountered in calculating GDP. c. difference between real versus nominal GDP. d. depreciation of the economy's capital stock.
Evaluate this statement: "People engaged in economizing behavior will always buy the lowest priced item they can find."
Which of the following statements is true?
A. Taxing the wealthy will lead to a more efficient economy. B. Taxing the poor will lead to a more equal distribution of income. C. A basic trade-off exists between the goals of equity and efficiency for a society. D. The forces of supply and demand will automatically lead to an equitable distribution of income.