Tying arrangements are always held to be illegal under U.S. antitrust law
Indicate whether the statement is true or false
FALSE
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The market demand curve for a product:
A. is the demand of an individual consumer. B. will lie to the right of all of the individual demand curves for a product. C. graphically is the vertical sum of the individual demand curves. D. will lie below all of the individual demand curves for a product.
The market-clearing price is:
a. the price at which the market is in equilibrium. b. the price at which mutually beneficial trade take place. c. the price at which sellers earn the maximum profit. d. the price at which consumer surplus is zero.
According to the search model developed by Stigler, when there are search costs, sellers know that consumers are becoming acquainted with product prices and consequently set the same price. In contrast, if there are no search costs, different prices can persist over time
Indicate whether the statement is true or false
Refer to the figure that shows the market for U.S. health care. The problem of rapidly rising medical care costs is best illustrated by the shifts of the demand and supply curves from D 1 to:
A. D 2 and S 1 to S 2 .
B. D 2 and S 1 to S 3 .
C. D 3 and S 1 to S 2 .
D. D 3 and S 1 to S 3 .