Describe two reasons why businesses hesitate to change prices
What will be an ideal response?
Businesses hesitate to change prices for two main reasons. First, companies know that consumers prefer predictable and stable prices. Consumers will be annoyed, and sometimes feel taken advantage of if the prices that they pay for final goods and services change every time that they demand them. Second, firms are afraid of “price wars,” a situation in which cutting prices may generate no change in market shares (if other firms follow the same strategy) but reduce profits for all firms involved. This dilemma is faced by some of the largest competing corporations in the world like Coca Cola and Pepsi, or McDonald’s and Burger King.
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Government funding for _______________ helps produce broadly available technology as well as scientific advances.
a. research and development b. individual copyrights c. political campaigns d. state and local governments
When a country starts exporting a good, there is no change in the surplus enjoyed by the domestic consumers of the good
a. True b. False Indicate whether the statement is true or false
Quantitative easing is:
A. asset purchases that shift the composition of the Fed's balance sheet. B. expansion of the demand for aggregate reserves to drive down the IOER. C. statements today about policy targets in the future. D. expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target.
The marginal revenue that would be derived from the production of a second unit is
A. $17.
B. $19.
C. $21.
D. $23.