There are hundreds of companies in the business of providing natural gas to residential users. For the most part, these local gas companies each only serve their local community, so they buy in very competitive markets but sell locally and without competitors. The wholesale market is therefore likely to be
A. monopoly.
B. oligopoly.
C. monopolistic competition.
D. perfect competition.
Answer: D
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Suppose that Firm ABC currently has a market share of 8 percent. Firm XYZ has a market share of 12 percent. What will happen to the Herfindahl-Hirschman index if the two firms merge? Show your work
What will be an ideal response?
When a strategy is the best one to follow no matter what strategy other players choose, it is called a:
A. golden decision. B. dominated strategy. C. dominant strategy. D. zero-sum strategy.
Your firm sells club soda in both grocery stores and convenience stores. You have a budget of $550 for store displays, and must decide how to allocate this budget between grocery stores and convenience stores to maximize the total number of sales. The following table shows the total number of units that can be sold in grocery stores and convenience stores, according to the number of displays in each type of store. Displays in grocery stores cost $150 each and displays in convenience stores cost $100 each.
Given the above information, at the optimal choice with a budget of $550, the last dollar spent on grocery store displays yields
A. 300 additional sales. B. 3.0 additional sales. C. 3.3 additional sales. D. 500 additional sales.
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.