Mergers may result in
A) anticompetitive behavior.
B) more efficient production.
C) fewer firms in a market.
D) All of the above.
D
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What is the multiplier effect and when do multiplier effects occur?
What will be an ideal response?
Suppose that capital and labor must be kept in a fixed proportion to produce a particular good. For example, digging a trench requires one worker who has one shovel. What does this imply about returns to scale?
A) There are constant returns to scale. B) There are increasing returns to scale. C) There are decreasing returns to scale. D) Nothing.
Which of the following short-run outcomes for monopolistic competition is NOT possible?
A) P = MR = MC. B) P > MC > ATC. C) P = ATC. D) P > ATC.
For a major country with extensive capital flows, what is the effect of an increase in interest rates?
a. a currency depreciation and increased net exports b. a currency depreciation and reduced net exports c. a currency appreciation and increased net exports d. a currency appreciation and reduced net exports