There are two firms in an industry and their products are perfect substitutes for each other. Each firm had a market share of 50% and charged equal prices
However, when the demand for the good declined due to a recession, Firm A lowered its price to increase sales. Firm B responded by lowering its price further. This is an example of the ________ of oligopoly. A) Bertrand model
B) Cournot model
C) Ricardian model
D) Keynesian model
A
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The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____
a. percentage; sales; percentage; EBIT b. unit; sales; unit; EBIT c. percentage; EBIT; percentage; sales d. unit; EBIT; unit; sales e. none of the above
Return to the case of Jan, the hyperbolic discounter from the previous question. What values of B and C will lead her to be consistent with a plan not to undertake the action?
a. C < B < 2C. b. B < C. c. B > 2C. d. B < C < 2B.
According to the representative heuristic, if Roger has many of the characteristics of a millionaire, then people will:
A. be less likely to think that he is a millionaire. B. want to have those same characteristics. C. be more likely to think that he is a millionaire. D. think that many people are millionaires.
When actual output exceeds potential output, _____
Fill in the blank(s) with the appropriate word(s).