What is the relationship between price, marginal revenue, and total revenue for a monopolist?
What will be an ideal response?
As shown in the following figure, the total revenue curve takes on a hump-back shape because it increases when marginal revenue is positive and decreases when marginal revenue is negative. For this reason, total revenue is at its maximum when the marginal revenue curve crosses the x-axis — that is the point where an additional unit of output causes marginal revenue to equal zero.
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In 1961, President John F. Kennedy, acting upon advice from his economists, proposed tax cuts. The advice he received
a. was opposed to the teaching of Keynes, who had taught that tax cuts were counterproductive. b. was opposed to the teaching of Keynes, who had taught that all attempts to stabilize the economy were futile. c. came from economists who had studied Keynes's ideas when those ideas were only a few years old. d. came from economists who were unaware of Keynes's ideas because those ideas had not yet been widely disseminated at that time.
Market failure is a situation in which
A. negative economic profits persist in the long run. B. negative economic profits exist in the short run. C. the market does not provide the ideal or optimal amount of a particular good. D. both a and b E. a, b, and c