Assume the firms firms operating in an oligopolistic market experience a relatively small change in marginal costs. According to the kinked demand curve model this would:

A) cause a large change in the profit-maximizing level of output.
B) leave the equilibrium price unchanged.
C) cause the profit-maximizing level of output to change by the same amount and in the same direction.
D) cause the profit-maximizing price to change by the same amount but in the opposite direction.


B

Economics

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Suppose the conditions of the first welfare theorem hold. If the government redistributes income prior to production and trade occurring, the market outcome (resulting from production and trade) will be efficient so long as no deadweight loss is produced in the levying of redistributive taxation.

Answer the following statement true (T) or false (F)

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a. True b. False Indicate whether the statement is true or false

Economics