When a monopoly is inevitable, the government often:
A. forces it to break into smaller firms.
B. sets a minimum price for the monopolist.
C. sets a maximum price for the monopolist.
D. None of these; monopoly is never inevitable.
Answer: C
You might also like to view...
When would a tax be efficient?
What will be an ideal response?
If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:
a. raise prices 1 percent. b. lower prices 1 percent. c. raise prices until the elasticity becomes very high. d. keep the price where it is. e. lower prices until the elasticity becomes very high.
In the classical model,
a. markets do not automatically clear. b. business demand for loanable fund exceeds business planned investment spending. c. there is no government sector, only private consumption and planned investment. d. businesses engage in interest-free borrowing. e. the government's demand for funds is vertical.
An increase in business inventories during a time period, ceteris paribus, will
A. Increase GDP during that period. B. Never affect GDP because changes in inventories are not included in the calculation of GDP. C. Not affect GDP during that period but will increase GDP in later periods when the inventory is sold. D. Decrease GDP during that period.