Splitting up a natural monopoly into two or more smaller firms would not only lower the average cost of production but also reduce price
a. True
b. False
Indicate whether the statement is true or false
False
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The combined effect on the loanable funds market of a new technology that increases the marginal physical product of capital and a shift in consumers' expectation of future prices, now expecting they will be lower than they earlier expected, is a(n)
a. increase in the interest rate b. decrease in the interest rate c. decrease in the quantity demanded and quantity supplied of loanable funds but unclear in what direction the interest rate will change d. increase in the quantity demanded and quantity supplied of loanable funds but unclear in what direction the interest rate will change e. shift in the demand curve to the left and the supply curve of loanable funds to the right
Suppose that the percentage change in supply is -50%, the price elasticity of demand is 4, and the price elasticity of supply is 1. The equilibrium price will:
A. decrease by 10 percent. B. increase by 55 percent. C. increase by 10 percent. D. decrease by 55 percent.