In the IO perspective it is important to enter an industry with
a. Low supplier power
b. Low threat from substitutes
c. Low levels of rivalry between firms
d. All of the above
d
You might also like to view...
According to real business cycle models,
A) the economy is normally at potential GDP. B) unexpected changes in monetary policy are the major source of fluctuations in real GDP. C) the long-run Phillips curve is negatively sloped. D) the economy is normally operating below the natural rate of unemployment.
The government decides to reduce its expenditure by $250. The multiplier in this economy is 4 and the tax rate is 22 percent. The net effect of this contractionary fiscal policy is to:
A. decrease the budget deficit by $30. B. increase the budget deficit by $30. C. decrease the budget deficit by $220. D. increase the budget deficit by $220.
Free trade ________ living standards by ________ economic efficiency
A) raises; increasing B) lowers; decreasing C) raises; equalizing D) lowers; eliminating
Consider two craft bourbons distilled in Brooklyn, New York: Kings County and Stillhouse. If the distilleries advertise, they can both sell more bourbon and increase their revenue. However, the cost of advertising more than offsets the increased revenue
so that each distillery ends up with a lower profit than if they do not advertise. On the other hand, if only one advertises, that distillery increases its market share and also its profit. a. Construct a payoff matrix using the following hypothetical information: If neither distillery advertises, each earns a profit of $500,000 per month. If both advertise, each earns a profit of $250,000 per month. If one advertises and the other does not, the distillery that advertises earns a profit of $750,000 and the distillery that does not advertise earns a profit of $125,000. b. If Kings County wants to maximize profit, will it advertise? Briefly explain. c. If Stillhouse wants to maximize profit, will it advertise? Briefly explain. d. Is there a dominant strategy for each distiller? Briefly explain.