A monopolistic producer supplying raw materials to two industries one with a lower price elasticity of demand and the other with a high price elasticity of demand, practices _____ to prevent its low price elastic consumers (who have more elastic demands) from reselling its products to high price consumers (who have less elastic demands).
a. vertical integration
b. price discrimination
c. double marginalization
d. price control
QUESTION 2Entrepreneurs are at the heart of the market process.
Indicate whether the statement is true or false
QUESTION 3A productivity slowdown could result from
a. an increase in capital formation.
b. an increase in the number of unskilled and inexperienced workers.
c. a decrease in the relative size of the service sector.
d. any of the above.
QUESTION 4The maximum price pipelines can charge for distributing gas:
a. is determined in a monopolistic market.
b. depends on the market demand and supply.
c. is set by the federal government.
d. is always above the legal minimum.
QUESTION 5Managers are at the heart of the market process.
Indicate whether the statement is true or false
QUESTION 6If the demand for labor increased but more slowly than the supply
a. wages would rise.
b. wages would fall.
c. there would be an increase in the amount of laborers employed.
d. both (b) and (c) would result.
QUESTION 7When two _____ monopolists merge, one division of the newly merged company will transfer its output to another division at its actual cost, instead of its profit maximizing price.
a. price discriminating
b. natural
c. output rationing
d. successive
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