What are the main differences between a monopolist and a perfectly competitive firm?
A monopolist is a price maker, while a competitive firm is a price taker. A competitive firm can therefore change its output level without any impact on market price, while a change in production by a monopolist implies a change in the price of the product. This is because, being the sole producer, the market demand curve is the demand curve the monopolist perceives. A competitive firm on the other hand perceives a demand curve horizontal at the market price.
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A major reason for regulating the financial sector is to facilitate __________ policy
A) monetary B) fiscal C) antitrust D) merger
In 2005–2006, the Fed increased interest rates in an attempt to halt inflation. What was the most likely effect of raising interest rates on velocity?
A. Velocity will decrease. B. Velocity will increase. C. Velocity will remain constant. D. Velocity is unrelated to saving accounts.