In the short run, how will a profit-maximizing monopolist react if its marginal cost suddenly increases? It will
a. lower price to expand revenue possibilities
b. restrict output to extract a higher price from customers
c. maintain the current price if profit is still positive
d. increase plant size to lower marginal cost
e. decrease plant size to lower marginal cost
B
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If saving supply decreases, the equilibrium real interest rate ________ and the equilibrium quantity of investment ________
A) rises; decreases B) falls; decreases C) falls; increases D) rises; increases E) does not change; does not change
C = $750 + 0.75(1 - 0.4)y i = $600 g = $500 nx = -$50
Use the above data to: a. Calculate the equilibrium level of GDP b. Calculate the value of the expenditure multiplier c. Find the change in the initial equilibrium GDP if autonomous investment increases by $75. d. Find the change in the initial equilibrium GDP if autonomous government purchases decreases by $50. e. Find the change in the initial equilibrium GDP if autonomous net exports increase by $10.