If an oligopolistic firm in a game theory kind of market cuts price, in the long run
a. the other firms will follow and all firms will be worse off
b. the price cutter will be worse off if other firms don't cut price as well because revenue equals price times output and since price was cut, its revenue must be less
c. its market share and profit will increase at the expense of its rivals
d. the other firms will follow and all firms will be better off because at lower prices, industry sales will increase
e. it will become a monopoly, having outsmarted its rivals, and will be able to raise the price again. That's how the game is played.
A
You might also like to view...
In 1997 a community in a Southeastern state passed a beautification ordinance (law prohibiting the placement of indoor furniture outside of homes, i.e., no couches on the porch). The law represents a conflict between __________ and __________
a. the rich; the poor b. third parties; private property rights c. consumers of goods; producers of goods d. public goods; private goods e. market failure; government failure
Under the Bretton Woods system of fixed exchange rates,
a. devaluations were frequent and small. b. devaluations were usually unforeseen. c. the IMF ensured that exchange rates were never changed. d. speculators could profit from an attack on a weak currency.
All of the following are examples of normative statements EXCEPT:
A. Reducing inflation should not be done at the expense of more unemployment. B. Economic growth should not be allowed to exceed 5 percent per year. C. The Federal Reserve should act decisively to reduce inflation. D. Unexpectedly high inflation redistributes wealth from lenders to borrowers.
Fernando decides to buy more land for his avocado farm. Which of the following situations most likely triggered his decision?
a. an unreliable market b. a profitable market c. a stagnant market d. a declining market