The contestable market model of oligopoly bases pricing and output decisions on:
A. the threat of new entrants into the market.
B. market structure.
C. market share.
D. the degree of product differentiation.
Answer: A
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A trigger strategy is one in which a player
A) cooperates in the current period if the other player cooperated in the previous period, but cheats in the current period only if the other player cheated in the previous period. B) cheats in the current period if the other player cooperated in the previous period, but cooperates in the current period if the other player cheated in the previous period. C) cooperates in the current period if the other player has always cooperated, but cheats forever if the other player ever cheats. D) cheats in the current period if the other player has always cheated, but cooperates forever if the other player has ever cooperated.
Unregulated markets will tend to
A. rapidly deplete any natural resource. B. naturally conserve any depletable natural resource by pushing up its price every year by a constant dollar amount. C. naturally conserve a depletable resource by pushing up its price at a constant rate every year. D. deplete a resource unless new supplies are found.
Which of the following would shift the FE line to the left?
A) A beneficial supply shock B) A decrease in labor supply C) An increase in consumer spending D) An increase in the money supply
The principle of comparative advantage essentially states that
A) there are some goods for which the opportunity costs of production are the same regardless of who produces them. B) some goods have high opportunity costs and low absolute costs. C) specialization can reduce output rather than increase it. D) total output of an economic system is greatest when each good is produced by those who have the lowest opportunity cost of producing the good.