A perfectly competitive firm's horizontal demand curve implies that the firm does not have to lower its price to sell more output
Indicate whether the statement is true or false
TRUE
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Which of the following could prevent the opportunistic behavior of firms?
A) efficient contracts B) good reputation C) revealing relevant information about firms D) All of the above
A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and rent $250,000/month. If the firm produces 1,000,000 units a month, the total variable costs equal
a. $125Million b. $45Million c. $1Million d. $170Million
A firm that acquires a substitute product can try and reduce inter-product cannibalization by
a. Doing nothing b. Repositioning its product or the substitute so that they do not directly compete with each other c. Pricing each product at the same level d. Raising prices on the low-margin products
Perfect price discrimination
a. is a common occurrence in situations with many buyers. b. occurs fairly often in situations with only a few buyers. c. is only observed in competitive markets. d. rarely occurs because firms do not have sufficient power to differentiate among specific buyers.