Why is price less than marginal revenue for a monopolist?
What will be an ideal response?
Consider the above figure. If the monopolist reduces its price from P1 to P2, its revenues increase by the area of the rectangle bcde. At the same time, however, its revenues decline by the area of the rectangle P1acP2. Marginal revenue is the difference between these two areas, which is less than the price of the one-unit change entailed in increasing output from Q to Q + 1. Thus, marginal revenue is less than price.
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Suppose the saving rate is greater than the golden rule saving rate (sG). First, explain what must happen to the saving rate in order to increase steady state consumption. Second, what are the advantages and disadvantages of this policy to increase steady state consumption
What will be an ideal response?
Imbalances in information can cause problems between:
A. buyers and sellers. B. lenders and borrowers. C. employers and employees. D. All of these statements are true.