Answer the following questions true (T) or false (F)
1. A product's price approaches its marginal cost as market concentration increases.
2. A vertical merger is one that takes place between two companies producing different goods or services for one specific finished product.
3. Holding everything else constant, government approval of horizontal mergers is more likely to be granted if the "market" that firms are in are broadly defined rather than narrowly defined.
1. FALSE
2. TRUE
3. TRUE
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If the public believes the commitment to a nominal anchor to be credible, the effect of a positive aggregate demand shock is for ________
A) short-run aggregate supply to shift up B) short-run aggregate supply to be unaffected C) short-run aggregate supply to shift down D) inflation, but not economic activity, to increase
In 2006, hurricanes damaged many parts of Texas, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused
A) scarcity, because the damages made food and shelter scarce. B) scarcity, because some goods were difficult to get. C) shortages, because supplies were cut off and goods were destroyed. D) tradeoffs, because some areas of the country were damaged when others were not.
The average total cost incurred by a firm is calculated by dividing:
a. the change in total cost by the change in the quantity of output. b. total output by the number of people employed. c. the change in total output by the change in the number of people employed. d. total cost by total output. e. total output by total cost.
The word that best describes the relationship between the required reserve ratio and the money supply is
A) direct. B) constant. C) inverse. D) roundabout.