A monopolist sets the price by matching which of the following?
a. The profit maximizing quantity to the price on the demand curve
b. The price to marginal revenue
c. The price to the average total cost curve
d. The price to the marginal cost curve
a. The profit maximizing quantity to the price on the demand curve
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If the price level rises by 4 percent and workers' money wage rates increase by 2 percent, then the
A) quantity of labor supplied decreases. B) quantity of labor supplied increases. C) quantity of labor supplied does not change because there is no change in the real wage rate. D) the supply curve of labor shifts rightward.
Refer to the payoff matrix below. In reference to the Nash equilibrium/equilibria in this game, which of the following is true?
Healthy Snacks and Best Treats are two firms competing in the health food snacks market. Both are considering introducing a new health food snack made purely of dried power fruits. The payoff matrix shows their net economic profit in millions for the different strategies.
A) Best Treats Introduce and Healthy Snacks Introduce is a Nash equilibrium.
B) Best Treats Do Not Introduce and Healthy Snacks Do Not Introduce is a Nash equilibrium.
C) Best Treats Do Not Introduce and Healthy Snacks Introduce is a Nash equilibrium.
D) There are no Nash equilibria in this game.
The authors note that the goal of maximizing the market value of the firm may be more appropriate than maximizing short-run profits because:
A) the market value of the firm is based on long-run profits. B) managers will not focus on increasing short-run profits at the expense of long-run profits. C) this would more closely align the interests of owners and managers. D) all of the above
Even if the steel industry is an oligopoly, there may be more firms competing with the steel firms than you would think because
a. economies of scale exist b. barriers to entry can be overcome c. firms in other industries producing close substitutes may compete in the markets in which steel firms compete d. economic profit lures other firms into the industry e. there is high product differentiation