If American Airlines engages in predatory pricing, it might:

A.) Lower fares when a new carrier enters the market and then raise fares as soon as the new carrier gains sufficient business.
B.) Raise fares when a new carrier enters the market and then lower fares once the new carrier leaves the market.
C.) Lower fares when a new carrier enters the market and then raise fares once the new carrier is driven out of business.
D.) Lower fares permanently once a new carrier enters the market in order to keep up in the expanding airline industry.


C.) Lower fares when a new carrier enters the market and then raise fares once the new carrier is driven out of business.

Economics

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The consolidated balance sheet of the all banks in Macroland is presented below:  AssetsLiabilitiesCurrency$1,000Deposits$1,000Loans$  900  Based on this balance sheet the banking system of Macroland can be described as a(n) ________ banking system.

A. 100-percent-reserve B. barter C. fractional-reserve D. government-insured

Economics

In the food and kindred products industry, it is estimated that the elasticity of output with respect to labor is 0.43 and the elasticity of output with respect to capital is 0.48

These two measures indicate that the primary metals industry is characterized by A) decreasing returns to scale. B) constant returns to scale. C) increasing returns to scale. D) no returns to scale.

Economics

Refer to the above figure. We are currently producing at point c. Which of the following statements is TRUE?

A) Resources are not being efficiently utilized. B) Resources are being efficiently utilized. C) The only way to produce more of Goods X or Y is to have an increase in the amount of resources. D) The Law of Increasing Additional Cost does not hold.

Economics

A downward-sloping portion of a long-run average total cost curve is the result of:

a. economies of scale. b. diseconomies of scale. c. diminishing returns. d. the existence of fixed resources.

Economics