Mutual interdependence among firms in an oligopoly means that:
a. firms never form a cartel.
b. it is difficult to know how firms will react to decisions of rivals.
c. no formal agreement is possible among firms.
d. firms never practice price leadership.
b
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Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
If this economy was entirely closed to international trade, equilibrium price and quantity would be
A. Pa and x. B. Pc and z. C. Pa and z. D. Pc and v.
Ethics play a key role in income redistribution.
A. True B. False C. Uncertain
The video rental market can be described as a monopolistically competitive market. As a result of the economic profit earned by the first video rental outlets,
a. existing firms were able to successfully lobby the government for patent protection b. competitors were attracted to the industry, and their entry reduced economic profit c. demand dried up d. Blockbuster saw an opportunity to take over the industry e. competitors were discouraged from entering the industry
If the price of coffee increases from $2.50 per cup to $3.00 per cup and the quantity demanded goes down from 120 cups per week to 115 cups per week, the absolute value of price elasticity of demand in that price range is approximately
A) 0.23. B) 4.35. C) 0.93. D) 2.34.