The strategy of establishing a price that prevents the entry of new firms is called:
A. Cartel pricing
B. Limit pricing
C. Price leadership
D. Profit maximizing price
B. Limit pricing
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Juanita makes $36 an hour at work. She has to take time off work to purchase her dress, so each hour away from work costs her $36 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling.
In response to the destructive bank panics of the Great Depression, future bank panics are designed to be prevented by
A) the Federal Reserve System conducting open market operations. B) the establishment of the Federal Deposit Insurance Corporation. C) establishing a fractional reserve system of banking. D) increasing the required reserve ratio to 100%.
The M1 measure of money is suggested by the ________ approach to measuring money.
A. investment B. speculative C. liquidity D. transactions
In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons. If the government then imposes a price support of $5 per ton,
A) a deadweight loss is created. B) the market becomes more efficient. C) consumer surplus increases. D) producers' economic profits increase. E) None of the above answers is correct.