Following their profit maximizing motivation, firms will differentiate their products in a way that maximizes welfare
Indicate whether the statement is true or false
F Firms will focus on differentiation that favors them relative to competitors, perhaps to take business from a competitor, for example, that adds little or no consumer surplus.
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Criticisms of the Brander-Spencer model include all EXCEPT which of the following?
A) the problem of insufficient information B) the problem of likely foreign retaliation C) the problem of harm to interests of consumers D) the problem of adverse effects of trade policy politics E) the problem of simultaneously causing harm to other industries
In terms of the aggregate demand and supply framework, a decrease in the money supply will shift the aggregate
A) demand curve to the right. B) demand curve to the left. C) supply curve to the left. D) supply curve to the right.
In the market for used cars
A) the market is efficient because the cars are bought by the people who value them the most. B) the market is inefficient because lemons drive out the high quality cars. C) no cars are sold, because people don't like buying lemons. D) Not enough information to determine.
Amber has opened a coffee shop for many years on a piece of land that she has also owned. She has also made accounting profits from the coffee shop. This year, rents in the area rose considerably, and Amber responded by deciding to sell the land and the
coffee shop to an apartment builder. How can you explain Amber's decision to sell her business? What will be an ideal response?