Explain why a monopoly or a perfectly competitive firm does not consider a rival firm's behavior, but an oligopoly and a monopolistically competitive firm do
What will be an ideal response?
A monopoly has no rivals. The market price tells a competitive firm everything it needs to know. An oligopoly or a monopolistically competitive firm's strategy will depend on the behavior of its rivals.
You might also like to view...
The difference between zero accounting profit and zero economic profit is that
A. an economic profit of zero indicates a fair rate of return because it includes the opportunity cost of a firm’s capital. B. an economic profit of zero indicates an unacceptable rate of return because it does not include the opportunity cost of a firm’s capital. C. an economic profit of zero indicates more than a fair rate of return because it includes opportunity cost and explicit cost. D. an accounting profit of zero indicates a fair rate of return because it includes the opportunity cost of a firm’s capital.
When a resource is being depleted and becomes scarce, the market's way of encouraging conservation is for the price of the resource to rise, without any government intervention
a. True b. False Indicate whether the statement is true or false
A payroll tax
A. Causes the net wage to increase. B. Increases the nominal cost of labor. C. Shifts the labor demand curve to the right. D. Shifts the labor supply curve to the right.
When American companies buy office buildings in Australia, they are generating a
A. Demand for U.S. dollars and a demand for a foreign currency. B. Supply of U.S. dollars and a supply of a foreign currency. C. Supply of U.S. dollars and a demand for a foreign currency. D. Demand for U.S. dollars and a supply of a foreign currency.