-The Above Figure Shows the Market Demand Curve for Long-Distance

question 69

Multiple Choice

-The above figure shows the market demand curve for long-distance land-based telephone calls.Suppose the marginal cost of a long-distance telephone call is 2¢ a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry.If the firms in the industry operate as perfect competitors,the price of a call is ________ per minute and if the firms in the industry operate as a monopoly,the price of a call is ________ per minute.

• A) 2 cents; more than 3 cents and less than 4 cents
• B) more than 3 cents and less than 4 cents; more than 3 cents and less than 4 cents
• C) 1 cent; 2 cents
• D) 2 cents; either equal to or more than 4 cents
• E) either equal to or more than 4 cents; 2 cents

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Definitions:

Contiguity

The temporal pairing of two events

Drive Reduction

A theory in psychology suggesting that motivation arises from the need to reduce internal drives such as hunger or thirst, leading to certain behaviors.

Behavior-Reinforcer Belief

The belief or expectancy that a particular behavior will lead to a specific reinforcing consequence.

Expectations

Beliefs or anticipations about the future, which can influence people's behavior and decision-making processes.