When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can:
A. lead to a reduction in sales.
B. accomplish a reduction in costs.
C. lead to an increase in cost.
D. accomplish an increase in sales.
Answer: B
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The above figure illustrates
A) a recessionary gap. B) a full-employment equilibrium. C) an inflationary gap. D) an equilibrium at the economy's physical limits.
See the information in Scenario 4.4. Suppose P = 10, Pc = 100, Pd = 2, A = 5, and I = 50. What is the cross-price elasticity of Rock and Roll Trivia programs and diskettes?
A) -1/90 B) 0 C) 1/90 D) 1 E) none of the above
This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.If MiiTunes and The Rock Shop are both in the music business and faced with the choices outlined in the figure, we can predict the outcome will be that:
A. there is more than one stable outcome to this game. B. MiiTunes charges high prices and The Rock Shop does not enter. C. there is no stable outcome to this game. D. None of these statements is true.
The production of methamphetamine (meth) is a social problem in the Midwest. Iowa is considering two potential programs: Operation Methbust would increase the number of sheriffs' deputies to search out and destroy methamphetamine labs. Operation Say No to Meth would increase the training required of public school teachers so that they could better educate students about the health risks of using meth. Assuming that each program were successful, which of the following statements is correct?
a. Both Operation Methbust and Say No would reduce the demand for meth.
b. Both Operation Methbust and Say No would reduce the supply of meth.
c. Operation Methbust would reduce the demand for meth; Operation Say No would reduce the supply of meth.
d. Operation Methbust would reduce the supply of meth; Operation Say No would reduce the demand for meth.