If two firms playing Cournot are identical with decreasing average costs, how should the firms divide production to maximize joint profits?
What will be an ideal response?
One firm should produce the monopoly output and divide the profit with the other firm. This will generate the largest possible profit for the two firms.
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Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
Refer to Figure 13-3. Which of the points in the above graph are possible short-run equilibria but not long-run equilibria? Assume that Y1 represents potential GDP
A) A and B B) B and D C) A and C D) C and D
A U.S. computer manufacturing company seeking to expand its operations to a lesser- developed country can expect
a. socioeconomic issues to be unimportant b. cost structures to be different c. to easily apply the same technologies as in the United States d. labor skills to be similar e. the same infrastructure as in the United States
Which of the following statements is FALSE?
A. Wants are unlimited and include all material and nonmaterial desires. B. Services are intangible goods such as dry cleaning, hospital care, and restaurant meal preparation. C. A good is anything that gives satisfaction or happiness to individuals. D. Economic goods are available in desired quantities at a zero price.