Refer to the scenario above. Which of the following will happen in equilibrium?
A) Firm A will use Strategy X, and Firm B will use Strategy Y.
B) Firm A will use Strategy Y, and Firm B will use Strategy X.
C) Both the firms will use Strategy X.
D) Both the firms will use Strategy Y.
B
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In the Bertrand model with homogeneous products,
A) the firm that sets the lower price will capture all of the market. B) the Nash equilibrium is the competitive outcome. C) both firms set price equal to marginal cost. D) all of the above E) the outcome is inconclusive.
The consumer price index is calculated by the:
A. Bureau of Labor Statistics. B. Congressional Budget Office. C. National Bureau of Economic Research. D. Social Security Office.
If a four-firm concentration ratio in an industry equals 75 percent, this implies that
a. 75 percent of all profits in the industry accrue to the leading four firms b. 25 percent of sales in the industry are accounted for by the four leading firms c. the four firms represent 75 percent of all the firms in the industry d. the four firms represent 25 percent of all the firms in the industry e. 75 percent of all sales in the industry are accounted for by the four leading firms
Sadie works at a factory for $15 an hour and typically works 40 hours a week. Sadie gets a pay raise and now earns $20 an hour. She decides to work 45 hours a week at $20 an hour. Her response to the pay increase demonstrates the:
A. labor effect outweighing the price effect. B. price effect outweighing the income effect. C. income effect outweighing the price effect. D. income effect outweighing the substitution effect.