Ameritech has a monopoly over local telephone service. If Ameritech is producing where marginal revenue is less than marginal cost, the firm
A. is maximizing profits.
B. could increase profits by reducing output.
C. must be earning a zero profit.
D. could increase profits by increasing output.
Answer: B
Economics
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Suppose the nominal interest rate is 1% and the rate of inflation is 3%. The real interest rate is therefore
A) -2%. B) 2%. C) 4%. D) 5%.
Economics
A very large number of small sellers who sell identical products imply
A) the inability of one seller to influence price. B) a multitude of vastly different selling prices. C) a downward sloping demand curve for each seller's product. D) chaos in the market.
Economics