Economic statements related to market structure and pricing
Macroeconomics
True/False: For each of the following concepts, decide whether it’s true or false, and briefly explain why (2-3 sentences). You can also use diagrams if they are helpful. Each correct answer is worth.
a. A monopolist can charge any price it wants.
b. An increase in a firm’s marginal costs will lead to less output.
c. A firm with pricing power will have a higher mark-up, the less elastic is demand.
d. In a competitive market, an increase in raw materials costs will shift the supply curve to the right.
e. Imposing a price ceiling (legal maximum price that can be charged) below the equilibrium price in a competitive market will lead to higher consumer surplus and an increase in social welfare.