Assume that five oligopolists begin with a common price of p = $15. One of the firms raises its price to $18. What are the other four firms likely to do, based on the theory of the kinked demand curve?
A. Raise their prices also, but by less than $3
B. Raise their prices by $3
C. Keep their prices the same
D. Lower their prices by less than $3
C. Keep their prices the same
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Which central bank has its exchange rate as a focus of its monetary policy?
A) Bank of Canada B) Bank of England C) European Central Bank D) Federal Reserve
Suppose an entrepreneur commits to a production schedule but overestimates the market price for her products. Which situation is not possible?
a. Price equals average total cost. b. Losses are greater than if she shut down. c. Total profit is positive. d. Average variable cost is greater than marginal cost. e. Total profit is zero.
The law of supply states that price and quantity supplied are
A) inversely related, ceteris paribus. B) directly related, ceteris paribus. C) not related. D) fixed.
A decrease in the price level
a. increases the quantity of goods and services supplied in the short run. b. decreases the quantity of goods and services supplied in the long run. c. decreases the quantity of goods and services demanded. d. increases the quantity of goods and services demanded.