The source(s) of monopoly power for a monopoly may be:
A. economies of scope.
B. patents.
C. economies of scale.
D. All of the statements associated with this question are correct.
Answer: D
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A highly profitable cartel arrangement among sellers contains the seeds of its own disintegration because
A) a monopoly arrangement is more unstable than an oligopoly arrangement. B) a price maintained above each cartel member's marginal cost is an incentive to offer secret price reductions to attract additional business. C) monopoly agreements will, in the long run, reduce net revenue to zero. D) net revenue for the cartel as a whole could be increased by producing at the level where marginal revenue equals marginal cost for each cartel member. E) the cartel members will have a strong incentive to reduce quality.
If a 10-year Treasury bond pays 3.1% and a 10-year corporate bond pays 7.4%, what is the interest rate spread on this particular corporate bond?
a. 4.3% b. 7.4% c. 10.5% d. 22.9%