The differences between a competitive market and a monopoly include all of these except:
a. excess profits would be competed away in a competitive market, but persist in a monopolistic market
b. a competitive market would work toward production of the quantity consumers seek, while a monopolistic market may restrict output to raise short term prices
c. a competitive market's cost curves will shift with the market, while a monopoly's cost curves will remain stable
d. a competitive market would work toward production of the quantity consumers seek, while a monopolistic market may restrict output to raise long term prices
c
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The figure above shows the labor market in a region. If a minimum wage of $8 an hour is imposed, then there are ________ unemployed workers
A) 20,000 B) 40,000 C) 60,000 D) 80,000 E) zero
Consider two goods--one that generates external costs and another that generates external benefits. The actual market outcome would
a. result in output that is lower than the efficient output for both goods. b. result in output that is higher than the efficient output for both goods. c. result in output that is lower than the efficient output for the good with an external benefit and output that is higher than the efficient output for the good with an external cost. d. result in output that is higher than the efficient output for the good with an external benefit and output that is lower than the efficient output for the good with an external cost.
Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices
a. encourage marijuana use, and the evidence supports this argument. b. encourage marijuana use, but the evidence does not support this argument. c. discourage marijuana use, and the evidence supports this argument. d. discourage marijuana use, but the evidence does not support this argument.
Suppose that Techno TV produces LCD televisions. At a price of $2,000 per television, Techno determines that its optimal output is 3,000 television sets per week. If prices are sticky and fears of a recession reduce demand for LCD televisions, we would
expect Techno to: A. reduce output in the long run. B. reduce output in the short run. C. raise prices in the short run to compensate for lost revenue. D. lower prices in the short run to offset the reduced demand.