When large firms in oligopoly markets cut their prices
A) we don't know for sure how rival firms will respond.
B) rival firms will also cut their prices to avoid losing sales.
C) rival firms will not change their prices because most of their customers have signed contracts that commit them to doing business with the same firms for the life of their contracts.
D) rival firms will not cut their prices because they fear that the federal government will accuse them of collusion.
A
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The mid-point method of calculating price elasticity of demand:
A. measures the percentage changes relative to a point midway between two points on a demand curve. B. measures the absolute change relative to a point midway between two points on a demand curve. C. measures the percentage change relative to a point midway between demand and supply. D. None of these is true.
Anna's Antiques expects to get two bidders for the unique china teacup it sells. Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability. If Anna holds an auction between the two customers, the expected value of this auction is
a. $70 b. $78 c. $85 d. $100
As a result of a tariff on an imported good,
a. domestic producers are better off because they sell more goods at the same price b. domestic producers are better off because they sell more goods at a higher price c. domestic producers are better off because they sell the same quantity of goods at a higher price d. domestic consumers are better off because there are more domestically produced goods available e. domestic consumers are neither better off nor worse off because imports do not change
Long term bonds have ________ interest rate risk
Fill in the blank(s) with the appropriate word(s).