A profit-maximizing monopolist produces the rate of output where
A. MR = MC and can set price at any amount it chooses.
B. MR = MC and determines price based on ATC.
C. MR = MC and determines price based on the demand curve.
D. Price = MC.
Answer: C
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As an economy moves from point to point along its production possibilities curve, which one of the following variables changes?
A) the total amount of resources employed B) the level of technology C) the time frame under consideration D) the amount of each good or service produced
Which of the following does Luddite reasoning get correct?
A. Historically, the demand for labor has actually increased as technology has advanced. B. New technology frequently causes some specialized labor skills to become obsolete. C. New technology tends to raise total output, leading to an increase in the demand for labor. D. Labor is necessary for building and maintaining machines, and so increased demand for machines increases the demand for labor.
The strategy of establishing a price that prevents the entry of new firms is called:
A. price leadership. B. a price war. C. setting a profit-maximizing price. D. limit pricing.
When prices are predetermined, the level of output that equals aggregate expenditure is called ________ output.
A. induced B. short-run equilibrium C. potential D. the natural rate of