Monopolies
The typical result of monopoly is ____________ prices and ____________ output than we find in a competitive market
What is higher, lower
Pam considers t-shirts and gym classes to be complementary goods.
If the price of gym classes increases, the quantity demanded of gym classes will ____, and the demand for t-shirts will _________
The quantity demanded of gym classes will decrease, and the demand for t-shirts will decrease
Shampoo and conditioner are complementary goods.
This is what happens to the price and quantity of conditioner if the price of shampoo decreases
What is price increases, quantity increases
Economies of scale exist when long run average cost are
What is constant
As price increases, quantity supplies
What is increases?
the best explanation of why the price adjusts following an increase in supply
What is at the initial price, there will be a surplus. Price must decrease until QD and QS are equal
Both monopolies and competitive firms try to maximize
What is profit?
The government of a small town is concerned about the litter created when people leave styrofoam cups used to serve large beverages on the ground. The government decides to tax these by implementing a $1 tax on these drinks. This is done to _______ the number of beverages sold in styrofoam cups
What is reduce the number of beverages sold in styrofoam cups?
If demand _____ and supply ___________ we would know that price would increase, and we would be unsure about quantity
What is increase, increase
As monopolist production increases, the price consumers are willing to pay for the good ___
What is decreases?
Economists have observed that when average incomes increase, purchases of fast food tends to decline. This means that fast food is a ______ good
What is an inferior good?
The price elasticity of supply of popcorn tells us how responsive _______ of popcorn are to changes in the price of popcorn
What is sellers
Assume that a monopolist faces diminishing marginal product. If this monopolist is producing a quantity where marginal revenue is equal to $16 and the marginal cost is equal to $17, the monopolist should ______ production and ______ the price to maximize profits
What is decrease production and increase the price to maximize profits
If the price of computers is expected to fall in the future, the current price will _____
What is increase?
The formula for calculating elasticity of demand is
% change in quantity demanded/% change in price