To maintain a monopoly, a firm must have
A) an insurmountable barrier to entry. B) a perfectly inelastic demand.
C) few competitors. D) marginal revenue equal to demand.
A
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A firm is producing a joint product, Product A and Product B, with variable proportions. At its current production levels, the marginal benefit of producing Product A is $3 and the marginal cost is $2 and the marginal benefit of producing Product B is $4 and the marginal cost is $5. To maximize profits, the managers of the firm should produce ________ of Product A and ________ of Product B.
A) more; less B) more; more C) less; more D) less; less
In the market for bank credit, a large bank sometimes announces a change in interest rates. After the changes in interest rates are announced, other banks in the industry usually react by changing their rates in the same way. This is an example of:
A. monopolistic competition. B. implicit collusion. C. the kinked demand curve model. D. a cartel.