In which of the following industry structures is the entry of new firms the most difficult?
A. Pure monopoly.
B. Oligopoly.
C. Monopolistic competition.
D. Pure competition.
Answer: A
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According to the classical model, money influences
a. only prices. b. nominal and real variables in both the long and short-run. c. both nominal and real variables but only in the short-run. d. only nominal variables.
The rail system in Metropolis is a natural monopoly. If the government regulates the system by setting the fare equal to marginal cost, which of the following will be true?
a. Price and output will be higher than if the monopoly were unregulated. b. Price and output will be lower than if the monopoly were unregulated. c. Price will be lower and output higher than if the monopoly were unregulated. d. Price will be higher and output lower than if the monopoly were unregulated. e. Profit will be lower than if the monopoly were unregulated, but price and output could either increase or decrease.