Giving reasons, state whether the following statement is true or false:
Giving reasons, state whether the following statement is true or false:
The supply curve of a good shifts to the right when prices of other goods rise.
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False, when price of other goods rise, it becomes more profitable to produce them in place of the given good, so supply curve will shift to left.
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True. Under monopoly firms is price maker. At that price the producer can sell the quantity which permits him. Therefore, for every price there is a quantity and for every quantity there is a price.
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