Refer to the above table. Suppose both governments offer their respective company a $10 million subsidy
What will be an ideal response?
Both companies would enter the market, since each knows that regardless of the other's decision, it will make some profit here.
You might also like to view...
In our study of monopoly, we found that monopolists can increase profit by segmenting the market and price discriminating (under third degree price discrimination). Now suppose a firm is producing an excludable local public good. Can you justify a form of such market segmentation and price discrimination as efficient?
What will be an ideal response?
A decrease in the price of GPS systems will result in
A) a larger quantity of GPS systems supplied. B) a decrease in the demand for GPS systems. C) a smaller quantity of GPS systems supplied. D) an increase in the supply of GPS systems.
Assume the long-term real interest rate is 4% and the expected inflation rate is 5%
If the Fed decreases the money supply and as a result, the expected inflation rate decreases to 2%, then based on the Fisher effect, the long-term real interest rate will ________ and the long-term nominal interest rate will ________. A) fall to 4%; rise to 7% B) remain at 4%; fall to 6% C) fall to 1%; fall to 6% D) fall to 6%; remain at -1%
In the housing market, rents serve the purpose of
A) making landlords rich. B) rationing the availability of existing housing. C) providing an entry by the government into the housing market. D) increasing tax collections by the community.