Firms would increase output as a reaction to
A. increases in costs of resources.
B. unplanned inventory increases.
C. decreased demand for output.
D. unplanned inventory reductions.
Answer: D
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There are many industries in the United States where only a few firms compete. These industries
a. have low Herfindahl-Hirschman Indexes b. are considered to be oligopolies c. are considered to be monopolistically competitive d. have four-firm concentration ratios that approach zero e. all practice price leadership
Indexation refers to
a. a process of adjusting the nominal interest rate so that it is equal to the real interest rate. b. using a law or contract to automatically correct a dollar amount for the effects of inflation. c. using a price index to deflate dollar values. d. an adjustment made by the Bureau of Labor Statistics to the CPI so that the index is in line with the GDP deflator.
An economy that is operating below its full-employment capacity is experiencing a(n):
A. tax-induced recession. B. recessionary gap. C. inflationary gap. D. market correction.
Refer to the normal-form game of price competition in the payoff matrix below.Firm AFirm B??Low PriceHigh Price?Low Price0,050,-10?High Price-10,5020,20Suppose that firm A deviates from a trigger strategy to support a high price. What is the present value of A's payoff from cheating?
A. 50 B. 30 C. 70 D. 20