Assume a firm lowers price below marginal cost to deter entry
A) This strategy is not credible.
B) This strategy is credible.
C) This strategy is illegal.
D) This strategy is immoral.
A
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In the basic closed-economy ISLM model, the IS curve can be described by an equation where
A) output is a function of consumption. B) money is a function of interest rates. C) output is a function of money. D) output is a function of interest rates.
At the profit-maximizing quantity of output for a monopolist, average revenue, marginal revenue, and price are all equal
a. True b. False Indicate whether the statement is true or false
If there are big gains to be had from specialization and trade, countries generally don't produce one good because:
A. there is perfectly free trade between national economies. B. national economies often are perfectly free markets. C. specialization is generally limited by trade agreements. D. All of these are true.
Figure 2-2
Assume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. represents the production possibility frontier for beef and wheat. Between points F and G, the opportunity cost increasing wheat by two bushels equals
a.
0.25 million pounds of beef
b.
1.75 million pounds of beef
c.
0.125 pounds of beef
d.
8.0 pounds of beef
e.
0.5 pounds of beef