Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly. Which of the following statements comparing the conditions in the industry under both market structures is true?
A) A monopoly will produce less and charge a lower price than would a perfectly competitive industry producing the same good.
B) A monopoly will produce more and charge a higher price than would a perfectly competitive industry producing the same good.
C) A monopoly will produce more and advertise more than would a perfectly competitive industry producing the same good.
D) A monopoly will produce less and charge a higher price than would a perfectly competitive industry producing the same good.
D
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One reason governments impose taxes is to ________
A) reduce the number of transactions in an economy B) redistribute funds via transfer payments C) increase competition among producers D) increase the volume of exports
The real interest rate is equal to the
A) nominal interest rate plus the inflation rate. B) nominal interest rate minus the inflation rate. C) nominal interest rate times the inflation rate. D) nominal interest rate divided by the inflation rate. E) inflation rate minus the nominal interest rate.