Evaluate the following statement. The Cournot model basically assumes that the sole decision of each firm in a duopoly is one of determining how much to produce not which price to set
What will be an ideal response?
This is essentially correct. Once each firm determines how much it is going to produce based on what its rival produces then the industry wide output determines the price that each will charge in order to sell that level of output.
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A(n) ________ in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the yield on corporate bonds, all else equal
A) increase; increase; decrease B) increase; decrease; decrease C) decrease; increase; increase D) decrease; decrease; decrease
Everything else held constant, when financial frictions increase, the real cost of borrowing ________ so that planned investment spending ________ at any given inflation rate
A) increases; falls B) decreases; falls C) decreases; rises D) increases; rises
Points inside the production possibilities frontier represent inefficient levels of production
a. True b. False Indicate whether the statement is true or false
In the early 1980s, the government used fiscal policy to fight a recession by ______.
a. increasing tax rates b. lowering tax rates c. limiting government spending d. suspending unemployment benefits