Suppose a firm that sells a variety of athletic shoes is trying to start a pattern of price leadership in its market. Which of the following is not a problem this firm might have to face?
a. Rivals recognize the intent of its actions.
b. Other firms may not necessarily follow the leader.
c. Other firms may not follow the leader but offer better service instead.
d. Differentiation among products allows for more variation in price.
e. The price leader must keep costs lower than other firms'.
E
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A steep slope in a time-series graph means the variable is
A) high. B) falling. C) rising or falling quickly. D) rising or falling slowly. E) very close to its trend point.
Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent. With this plan
A) the quantity of apartments demanded will increase. B) the quantity of apartments supplied will increase. C) young people and poor people will have an easier time finding apartments. D) the deadweight loss in Chicago's apartment market will be eliminated. E) there will be a surplus of apartments offered for rent.
Compared to perfect competitors in the long run, oligopolists charge ______ prices and earn more ______.
Fill in the blank(s) with the appropriate word(s).
A shortage exists
A) in equilibrium. B) when quantity supplied is greater than quantity demanded. C) when quantity supplied is less than quantity demanded. D) at the market clearing price.