TCO 3) a.) Do you agree or disagree with the statement that: “A monopolist always charges the highest possible price.”? Explain. b.) Why can’t an individual firm raise its price by reducing output or lower its price to increase sales volume in a purely competitive market? (Points : 25)
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(TCO 2) What effect should each of the following have on the demand for gasoline in a competitive market? State what happens to demand. Explain your reasoning in each case and relate it to a demand determinant.
(a)an increase in the number of cars
(b)the economy moves into a recession
(c)an increase in the price of car insurance, taxes, maintenance
(d)consumer expectations of substantial price increases in gasoline
(Points : 25) |
