How does monopoly arise?
What will be an ideal response?
Monopoly arises if a firm is selling a good that has no close substitutes and if the firm is protected from competition by a barrier to entry. As a result, a monopoly is the only firm in its market.
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Refer to the figure above. When the supply curve of flash drives is S2 and the demand curve of flash drives is D, what is the surplus in the market when the price is $7?
A) 0 units B) 10 units C) 20 units D) 40 units
If national saving increases, ________. (Assume that the capital account is zero and net transfers are zero.)
A) the sum of domestic investment and net exports must decrease B) the sum of domestic investment and foreign investment must decrease C) the sum of domestic investment and foreign investment must increase D) foreign investment must decrease to cover the gain