Which of the following is false?
a. A true or pure monopoly exists where there is only one seller of a product for which no close substitute is available.
b. The situation in which one large firm can provide the output of the market at a lower cost than two or more smaller firms is called a natural monopoly.
c. In monopoly, the market demand curve may be regarded as the demand curve for the firm because it is the market for that particular product.
d. A monopoly firm is a price maker, and it will pick a price that is the highest point on its demand curve.
d
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Assuming all excess reserves are loaned out, currency holdings by the public are zero, and a reserve ratio of 2 percent, an initial deposit of $500 will lead to a total increase in deposits of
A) $250. B) $5,000. C) $25,000. D) $50,000.
If demand were inelastic, then we should immediately:
a. cut the price. b. keep the price where it is. c. go to the Nobel Prize Committee to show we were the first to find an upward sloping demand curve. d. stop selling it since it is inelastic. e. raise the price.