If the game in Scenario 13.17 were to be infinitely repeated, waging a price war might be a rational strategy
A) because there would be no short-term losses.
B) because the short-term losses might be outweighed by long-term gains from preventing entry.
C) if the potential entrant were irrational.
D) if the monopolist had excess capacity.
E) if there were no sunk costs to the potential entrant.
B
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How does one determine whether demand is elastic, inelastic, or unit elastic?
What will be an ideal response?
The country with the lowest degree of central bank independence in the period 1973-88 was ________
A) Germany B) Japan C) The United States D) Spain
Samia has decided that with the two hours in between classes she can do one of 3 things. She has ranked her choices, from highest to lowest as, (1 ) chat with her friends, (2 ) study economics or (3 ) take a nap
The opportunity cost of chatting with her friends is A) the combined value of studying economics and taking a nap. B) the value of studying economics, the next best use of time. C) the value of chatting with her friends. D) zero since she does not pay her friends to talk to her.
Define the following terms and explain their importance to the study of economics:
a. regressive tax b. proportional tax c. progressive tax d. direct tax e. indirect tax