Which of the following statements is correct?
A. The pure monopolist will maximize profit by producing at that point on the demand curve
where elasticity is zero.
B. In seeking the profit-maximizing output, the pure monopolist underallocates resources to its
production.
C. The pure monopolist maximizes profits by producing that output at which the differential
between price and average cost is the greatest.
D. Purely monopolistic sellers earn only normal profits in the long run.
Answer: B
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Resources are items that a society uses to create goods and services
Indicate whether the statement is true or false
In the Keynesian model of an open economy, a temporary decrease in government purchases would ________ the domestic real interest rate and ________ net desired saving (desired saving less desired investment) in the economy
A) lower; increase B) lower; decrease C) raise; increase D) raise; decrease