Suppose an oligopolistic market has only two firms. Which of the following is true if the firms refuse to cooperate?
a. Allocative efficiency will be achieved.
b. Competition for market share will increase.
c. Decision making will be mutually independent.
d. Prices will be at the same level as in a monopoly market.
b
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Short-term economic fluctuations are ________ in length and severity and ________ to predict.
A. irregular; easy B. regular; easy C. regular; difficult D. irregular; difficult
Which of the following would be most likely to maintain that spending increases and larger budget deficits would help promote recovery from the recession of 2008-2009?
a. supply-side economists b. new classical economists c. Keynesian economists d. proponents of the crowding-out theory
Figure 14-2
If the Fed anticipates that the conditions illustrated by AD2 and SRAS in will be present in the near future, it should
a.
decrease the discount rate.
b.
reduce reserve requirements.
c.
sell U.S. treasury bonds on the open market.
d.
buy U.S. treasury bonds on the open market.
If a monopolistically competitive firm is making positive economic profits, we would expect
A. entry of other firms. B. the firm to continue making the positive economic profits. C. the firm to hire more labor. D. the firm to expand market share and the industry to move toward an oligopoly structure.