The long-run demand curve for a monopolistically competitive firm is horizontal.

Which of the following does a social planner necessarily need to know to restore efficiency in a monopoly market?

A) The monopolist's marginal costs only B) The buyers' demand for a close substitute of the product sold in the market C) The monopolist's marginal revenue and the tax levied on the sale of the good D) The monopolist's marginal costs and the buyers' willingness to pay for the good

Suppose the central bank announces that it will pursue a monetary expansion in the current period and a monetary expansion in the future. Explain how the credibility of the central bank might influence the effectiveness of this monetary policy action and announcement of a future monetary policy action

What will be an ideal response?