For a monopoly, the marginal revenue from selling an extra unit of output is less than the price of that unit.
Answer the following statement true (T) or false (F)
True
If a firm must lower its price to sell additional output, marginal revenue is less than price. For example, if the price is $5 when quantity is 1 and the price falls to $4 when quantity is 2, the MR of the second unit is $3 ($8 - $5), which is less than the price of $4.
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Which of the following business practices, if proven to exist, is always illegal under U.S. antitrust law?
A) tying arrangements B) price fixing among competitors C) exclusive dealing D) all of the above
How does a firm in monopolistic competition decide whether to operate at a loss or shut down in the short run?
What will be an ideal response?
Which of the following explains why the demand for money curve has an inverse relationship between the interest rates and the quantity of money demanded?
a. As the interest rate rises, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. b. As the interest rate rises, people find it advantageous to borrow money, which increases the quantity of money demanded. c. As the interest rate falls, the opportunity cost of holding money rises, and people respond by converting cash or checking account balances into interest-bearing financial investments. d. As the interest rate rises, the demand for money curve shifts outward to the right.
_____ capital refers to tangible items that are created to increase productivity, such as, tools, factories, machinery, etc.
Fill in the blank(s) with the appropriate word(s)