Using the liquidity preference framework, what will happen to interest rates if the Fed increases the money supply?
What will be an ideal response?
The Fed's actions shift the money supply curve to the right. The new equilibrium interest rate will be lower than it was previously.
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In an industry with a large number of firms,
A) each firm will produce a large quantity, relative to market demand. B) one firm will dominate the market. C) collusion is impossible. D) competition is eliminated. E) barriers to exit must exist.
For a monopolist, the marginal revenue gained when one more unit of output is sold is
A) the price at which the extra unit is sold minus the loss in revenue that results from cutting the price on units sold previously. B) equal to the price of the product. C) negative if price is above the midpoint of the demand curve. D) the average revenue created by the increased sales.