Why is a monopoly inefficient?
What will be an ideal response?
A monopoly is inefficient because it produces such that price is greater than marginal cost. To achieve maximum economic profits, the monopolist restricts output and raises price. When price is greater than the opportunity cost to society of producing the last unit, the allocation of resources is inefficient. Society would prefer more resources were allocated into production of the good produced by the monopolist.
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The elements of investment spending are ________
A) calculated only in real terms B) equivalent to their corresponding international transactions C) consumption, government, exports and imports D) highly procyclical
During the Great Depression of the 1930s, the unemployment rate in the United States peaked at around
a. 5 percent b. 10 percent c. 12 percent d. 25 percent e. 50 percent
What is a positive effect of advertising?
A. It can reduce long-run average total cost by promoting economies of scale. B. It promotes brand loyalty and economic concentration in industry. C. It is designed to persuade rather than inform consumers. D. It reduces economic efficiency in the economy.
Refer to the above table. What is the market quantity demanded at a price of $8?
A. 15 B. 5 C. 35 D. 44