If the electric company is allowed by regulators to earn only a normal profit, it will produce at the point where

Which of the following statements about oligopolies is not correct?

a. There are only a few firms in the industry. b. Each firm possesses some market power. c. Oligopolistic firms are always large. d. An important reason for the existence of oligopolies is the presence of economies of scale.

Suppose the central bank of Altoska has raised its reserve requirements from 10 percent to 12 percent. If Trust Bank, a commercial bank, finds that it is not holding enough in reserves to meet the higher requirements, then it is likely to: a. increase its excess reserves

b. buy bonds to increase the size of its reserve assets. c. reduce the quantity of money and loans on the balance sheet. d. borrow from the central bank for a short term.