On a national level, the concentration ratio for grocery stores is very low. But, the "true" market for grocery stores is local in nature. What limitation does the geographic market put on the measure of concentration for grocery stores?
A) On the local level, grocery stores are more concentrated than they appear on the national level.
B) On the local level, grocery stores are not as concentrated as they appear on the national level.
C) The level of concentration is overestimated when viewing the national level.
D) Both answers A and C are correct.
A
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Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very little business. Aiyanna now decides to lower pizza prices by 5% per week for an indefinite period of time. We can expect that each successive week
A. demand will become less price elastic. B. the elasticity of supply will increase. C. price elasticity of demand will not change as price is lowered. D. demand will become more price elastic.
A monopsonist that wants to hire more labor must pay more for the new labor than it is currently paying and increase the wage rate of all existing employees because
A) the demand curve for labor is inelastic. B) of labor unions. C) the supply of labor is upward sloping. D) of competition in the labor market.
A natural monopoly
a. is a monopoly in the production of raw materials. b. occurs when one firm can supply the entire market more cheaply than can a number of firms. c. is one result of a patent. d. results from decreasing returns to scale.
If both imports and exports rose, a. AD would decrease
b. AD would increase. c. AD would decrease if exports rose more than imports. d. AD would increase if exports rose more than imports.