In general, horizontal mergers will
A) increase the number of firms in an industry.
B) decrease the number of firms in an industry.
C) increase competition in an industry.
D) reduce economic profits in an industry.
Answer: B
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No firm's total revenue could exceed its total opportunity costs if
A) all firms were price takers. B) prices always cleared the market. C) quantity demanded of every good equaled the quantity supplied. D) the future were completely predictable. E) there were no legal restrictions on entry into any industry.
Health insurance companies impose deductibles on policies and co-payments on claims
A) to reduce moral hazard problems. B) to increase prices. C) to increase sales. D) to reduces sunk costs.
Open market operations are
A) the buying and selling of existing U.S. government securities in open private markets by the Fed in order to change the money supply. B) the buying and selling of existing U.S. government securities in open private markets by citizens. C) the selling of new government securities by banks in order to increase the money supply. D) the selling of new government securities in open private markets by banks in order to finance the deficit.
Courtney goes for an hour bike ride which yields a marginal utility of 8. She stops and gets an ice cream cone, and then rides her bike for another hour. We can say:
A. the utility gained from a second ice cream cone was more than a second hour of bike riding. B. the utility gained from the ice cream was more than 8. C. the utility gained from the ice cream was less than the second hour of bike riding. D. the utility gained from a third hour of biking would be less than the utility gained from the one ice cream.