Airline regulation by the CAB kept prices the same on any route and also set prices high. This led airlines to offer high quality service, which raised costs to the level of prices
Indicate whether the statement is true or false
T Airline regulation by the CAB was misguided and resulted in a nonoptimal system of air travel.
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To determine the marginal social cost (MSC) of abatement, we find the sum of
a. MPC + MAC b. ?MAC + MCE c. MAC + ?MCE d. MAC + ?MEC
An incumbent's threat to use limit pricing if a firm enters the market
A) is credible if the firms have identical costs and market demand supports both firms. B) is credible if the firms have different costs and market demand won't support both firms. C) is not credible if the firms have different costs and market demand won't support both firms. D) is cheap talk, because the other firm will enter and the incumbent will still be able to charge monopoly pricing.
Problems are most likely to arise when:
A. one person knows more than another. B. both parties lack the same information. C. people have good enough information to make acceptable choices. D. complete information is impossible to obtain.
If real output in an economy is 1,000 goods per year, the money supply is $300, and each dollar is spent an average of 4 times per year, then according to the quantity equation, the average price level is
a. 3.33. b. 0.83. c. 1.20. d. 13.33.