A market comprised of only two firms is called a
A) competitive market.
B) duopoly.
C) monopoly.
D) monopolistically competitive market.
Answer: B
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Suppose Erie Textiles can dispose of its waste "for free" by dumping it into a nearby river. While the firm benefits from dumping waste into the river, the waste reduces fish and bird reproduction. This causes damage to local fishermen and bird watchers. At a cost, Erie Textiles can filter out the toxins, in which case local fishermen and bird watchers will not suffer any damage. The relevant gains and losses (in thousands of dollars) for the three parties are listed below. WithFilterWithoutFilterGains to Erie$200$400Fisherman$180$50Bird Watchers$130$25When Erie Textiles operates with a filter, the total gain (in thousands of dollars) by all three parties is ________.
A. $600 B. $475 C. $510 D. $985
The purpose of limited capital account convertibility is to:
A. limit trade in certain types of assets. B. eliminate trade in assets. C. limit trade in certain types of goods and services. D. eliminate trade in goods and services.
If Sara Thomas' disposable income increases from $4,000 to $4,500 and her level of saving increases from $200 to $300, it may be concluded that her marginal propensity to:
a. Consume is .75 b. Save is .30 c. Consume is .60 d. Consume is .80
When Pepsi becomes more expensive relative to other beverages, people will purchase less Pepsi. This observation is known as the:
A. diamond-water paradox. B. law of diminishing marginal utility. C. substitution effect. D. income effect.