The mutual interdependence of oligopolists ensures that each oligopolist has
A. a reaction function.
B. a perfectly elastic demand curve.
C. a fundamental dilemma about whether to collude or not.
D. a unique demand curve.
Answer: A
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In a closed economy, private saving is equal to which of the following? (Y = GDP, C = Consumption, G = Government purchases, T = Taxes, and TR = Transfers)
A) Y + TR - C - T B) Y - C - T C) Y - G - T + TR D) Y - G - T
A company finds that at its present level of production, MC = AVC at $15, MC = ATC at $20, and MC = MR at $17. Your advice to the firm regarding its short-run operations is
A) to continue production, as it is earning an economic profit of $2 per unit. B) to continue production, as it is earning an economic profit of $3 per unit. C) to shut down. D) to continue production at a loss.
Under what conditions would firms be likely to support an industry-wide advertising ban?
What will be an ideal response?
If real disposable income is $300 billion and real consumer expenditures are $250 billion, it can be assumed that
A. the government is spending the difference. B. the difference is being invested. C. households are saving the difference. D. transfer payments make up the difference.