Why is the economic analysis of oligopoly so difficult? What two generalizations can be made about the pricing behavior of monopolists?
What will be an ideal response?
Oligopoly is hard to analyze because it covers many different market situations. There are both homogeneous and differentiated oligopolies. The number of firms that dominate oligopolies can vary substantially, for example from two or three firms to ten firms. Mutual interdependence among rivals also makes it difficult to estimate a demand curve for a firm. Each firm must consider the reaction of rivals in establishing its price policy.
Despite the difficulties of analyzing oligopolies, two important generalizations can be made about this market structure. First, oligopolies tend to have inflexible prices. Second, oligopolies tend to change price simultaneously.
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List four things that can shift the demand for an input
What will be an ideal response?
Liquidity is defined as
A) the ease with which a given asset can be converted to a store of value. B) the ease with which a given asset can be converted to a unit of account. C) the ease with which a given asset can be converted to a standard of deferred payment. D) the ease with which a given asset can be converted to a medium of exchange.
Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?
A) export promotion B) import substitution C) international commodity agreements D) Infant Industry promotion E) intra-industry trade practice
A country can control
A) its flexible exchange rate. B) monetary policy oriented toward domestic goals. C) international capital movements. D) foreign inflationary policies. E) and avoid risks in international trade.