In which of the four oligopolistic markets below is there considerable price competition?
A. music production industry
B. airline industry
C. stent industry
D. high-definition DVD industry
Answer: B
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In the short run, a firm might choose to produce rather than shut down even if its market price is less than its average total cost of production
Indicate whether the statement is true or false
One difference between futures and options contracts is
A) funds change hands daily in the case of options but not with futures. B) funds change hands daily in the case of futures, but not with options. C) in the case of futures funds only change hands when they are exercised. D) futures are designed to reduce risk while options are not.
Refer to Scenario 10.2. Suppose that in addition to the tax, a business license is required to stay in business. The license costs $1000. What happens to profit?
A) It increases by $1000. B) It decreases by $1000. C) It decreases by less than $1000. D) It stays the same.
The main disadvantage to forming a corporation is
a. low profits b. double taxation c. small number of owners d. difficulty in raising funds e. stockholders usually control the company