When you go to a grocery store, most candy bars of a given size sell for virtually the same price. Can we conclude that this is evidence of collusion on the part of candy bar manufacturers?
Probably not. The manufacturers generally sell their product to distributors who then stock and sell the candy to local stores. The distributors, and the stores themselves, find it advantageous to maintain a uniform price for all candy bars (not including sale items). Competition might be evidenced by differing prices between stores and between local distributors.
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When potential GDP increases, is it necessarily the case that real GDP increases as well? Explain
What will be an ideal response?
The price index was 120 in 2012 and 126 in 2013 . What was the inflation rate?
a. 5.0 percent b. 6.0 percent c. 7.2 percent d. 105 percent
Suppose the government imposes a small carbon tax on automakers. But the price of gasoline has doubled due to a Middle East crisis which has reduced oil production. In the market for autos, these changes mean that supply and demand have both changed with the effect on the demand larger than the effect on the supply. The result is that the price of autos will ________ and the number of autos sold will ________
Fill in the blank(s) with correct word.
When the price and output decisions of one firm include the possible price and output reactions of the firm's rivals, the market is
A. a monopoly characterized by differentiated products. B. an oligopoly characterized by mutual interdependence. C. perfectly competitive characterized by collusion. D. monopolistically competitive characterized by nonprice competition.