What will happen to profits and domestic prices when a quota is used to protect a domestic monopolist from international competition?
a. Profits will fall; domestic prices will fall.
b. Profits will fall; domestic prices will rise.
c. Profits will rise; domestic prices will rise.
d. Profits will rise; domestic prices will fall.
Answer: c. Profits will rise; domestic prices will rise.
Economics
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A clause in a loan contract disallowing the borrower from acquiring other companies during the term of the loan is an example of a
A) guarantee. B) collateral agreement. C) restrictive covenant. D) moral hazard.
Economics
Exhibit 9-1 A monopolistic competitive firm
?
As represented in Exhibit 9-1, the maximum long-run economic profit earned by this monopolistic competitive firm is:
A. zero. B. $200 per day. C. $1,000 per day. D. $20,000 per day.
Economics