The demand curve for labor of a monopolist
A. slopes upward because monopolists use more capital than do perfectly competitive firms.
B. slopes down because of the law of diminishing marginal product and because the monopolist must lower prices to sell additional units of the good.
C. is horizontal even though the demand curve for labor for a competitive firm is downward sloping.
D. slopes down for the same reason as the demand curve for labor of a perfectly competitive firm.
Answer: B
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If there are 1,000 rutabaga farms, all perfectly competitive, an increase in the price of fertilizer used for growing rutabagas will
A) have no effect on the total quantity of rutabagas supplied, because no farm has enough market power to raise the price. B) have no effect on the total quantity of rutabagas supplied, because each farm's supply curve is a vertical line. C) decrease the total quantity of rutabagas supplied, because each farm's supply curve shifts leftward. D) reduce the total quantity of rutabagas supplied, because each farm's supply curve is a horizontal line and will shift upward.
A price ceiling is only effective if it is above the market equilibrium
a. True b. False Indicate whether the statement is true or false