The textbook rejects the cost-plus-markup theory of price setting because
A) business firms do not describe their price-setting procedures as cost-plus procedures.
B) competitors and monopolists set prices in different ways.
C) it cannot explain the prices we actually observe.
D) it ignores the role of government in regulating prices.
E) no single theory can explain all price-setting.
C
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Any country with highly attractive domestic investment opportunities and a low savings rate will tend to
a. run a current account deficit that is equal to its capital account surplus. b. run a current account surplus deficit over a long period. c. tend to be relatively poor (compared with other countries). d. run a current account deficit.
Suppose Belgium produces only two goods, chocolate and lace. If Belgium has a comparative advantage in lace, a move toward free trade will
A) benefit chocolate workers, harm lace workers in the short run, but benefit the nation as a whole. B) harm chocolate workers in the short run, benefit lace workers, but benefit the nation as a whole. C) benefit chocolate workers, harm lace workers in the short run, but harm the nation as a whole. D) harm chocolate workers in the short run, harm lace workers, but benefit the nation as a whole.
The primary disadvantage of engineering methods for measuring cost functions is that they deal with the managerial and entrepreneurial aspects of the production process or plant
a. true b. false
A national chain of grocery stores wants to finance the construction of several new stores. The firm has limited internal funds, so it likely will
a. demand the required funds by buying bonds. b. demand the required funds by selling bonds. c. supply the required funds by buying bonds. d. supply the required funds by selling bonds.