Assume that four oligopolists begin with a common price of p = $20. One of the firms lowers its price to $17. What are the other three firms likely to do, based on the theory of the kinked demand curve?
A. Lose $3 per unit
B. Make $3 more per unit than the firm that lowered price
C. Raise their prices above $20 to make up for the lost volume
D. Lower their prices to $17 so that they won't lose business to their competitor
D. Lower their prices to $17 so that they won't lose business to their competitor
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Holding other things constant, if the US dollar appreciates, it makes the US exports
a. Less attractive to foreigners b. More attractive to foreigners c. Neither more nor less attractive to foreigners d. None of the above
Unemployment caused by automation would be broadly classified as
a. structural. b. frictional. c. cyclical. d. induced.
Which of the following statements reflects a situation in which there are external benefits?
A. John's decision to get vaccinated for smallpox reduces the chances that his neighbor Pete will get smallpox. B. John paints his house and cleans his paintbrushes in the nearby stream. C. John sells his car to his neighbor Pete at half the first-hand price. D. John pays 5 percent of his income as taxes.
Which of the following is NOT an advantage of a partnership?
A) limited liability B) easy to form C) Profits are subject to only personal taxation. D) permits more effective specialization in occupations