One of the conclusions of the model of monopoly is that the firm earns economic profits above the required opportunity cost of the factors of production. Are these profits lost to society? Do they take spending power from the economy, and act as a brake on economic growth?
What will be an ideal response?
No. The profits are “transferred” from the buyers of the good or service to the sellers. Therefore, the profits remain in the society at large, even though they have changed hands. (Presumably, sellers will spend the income, or save it, as effectively as others could.)
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Deregulation
a. Began in Europe in the 1960s b. Began in the United States in the late 1970s and early 1980s c. Did not spread to Europe d. Has been a failure e. Both b and c are correct
The most successful region of transition
a. Central Europe b. Russia c. Central Asia d. Belarus e. Afghanistan
Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?
a. P > AR b. MR > MC c. P > MC d. All of the above are correct.
An incentive is a
A. concept that does not actually affect people's behavior. B. want. C. reward for desired behavior. D. need.