Explain how a single-price monopoly determines its output and price. Compare this process to how a perfectly competitive firm determines its output and price
What will be an ideal response?
Single-price monopolies follow the same profit-maximizing rule as perfectly competitive firms and set their output level where marginal revenue equals marginal cost. However, unlike perfectly competitive firms, monopolies have control over price and can charge as much as the market will bear; therefore, given the quantity they produce, the monopoly chooses its price from the market demand curve.
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The "double coincidence of wants" is
A) what is needed to use money. B) eliminated with the use of money. C) money's role as a unit of account. D) how value is stored when we transact with money. E) eliminated when we barter instead of using money.
Refer to Figure 17-3. The shifts shown in the short-run and long-run Phillips curves between period 1 and period 2 could be explained by
A) an increase in the natural rate of unemployment from 5.5 to 6.8 percent. B) an increase in the expected inflation rate from 4.0 to 5.5 percent. C) either an increase in expected inflation from 4.0 to 5.5 percent or an increase in the natural rate of unemployment from 5.5 to 6.8 percent. D) None of the above is correct.