The model in which one firm sets its price first, and others in the industry charge the same price is known as:
a. the Nash equilibrium.
b. price leadership.
c. a tit for tat strategy.
d. prisoners' dilemma.
Ans: b. price leadership.
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The above figure shows an individual's demand curve for time per month spent telecommunicating while driving (talking on the car phone.) A car phone is useless except for talking with somebody who is not in the car
If calls are priced at ten cents per minute, what is the consumer surplus derived from talking? What is the most this person would pay for the car phone? Explain.
Constructing plastic containers produces air pollutants. Therefore, in the market for plastic containers,
A) the marginal social cost curve is above and to the right of the demand curve. B) the marginal social cost curve is below and to the left of the demand curve. C) the marginal social cost curve is above and to the left of the supply curve. D) the marginal social cost curve is below and to the right of the supply curve. E) there is a gap between quantity supplied and quantity demanded in equilibrium.
An increase in demand will lead to a decrease in supply in the long run.
Answer the following statement true (T) or false (F)
A person who is unemployed because of a mismatch between the person's skills and current employment requirements is experiencing
A. cyclical unemployment. B. frictional unemployment. C. seasonal unemployment. D. structural unemployment.