Critically evaluate the following statement. "Since monopolies are by definition a one-firm industry they are able to charge the consumer the highest price possible."
What will be an ideal response?
This is false. Even monopolies must abide by the law of demand. The goal of the monopolist like any other firm operating in any other industry is to maximize profit, not maximize the selling price. After all, if the price charged were high enough the firm would soon be serving very few customers if any.
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Refer to Figure 21.1. The middle 20% of the population earn ________ of total income
A) 16% B) 23% C) 28% D) 32%
John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending
A) the economy will benefit in the short run and benefit by an even greater amount in the long run. B) this will have a major negative impact on the economy in both the short run and in the long run. C) this may benefit the economy in the long run, but could be counterproductive in the short run. D) this may benefit the economy in the short run, but not in the long run.