Firm A producing one good acquires another firm B producing another good. The cross price elasticity of demand for the goods owned by each firm is 2.6 . Holding other things constant, the acquiring firm should
a. Raise prices on both goods
b. Lower prices on both goods
c. Raise price on the acquired good only
d. Need more information
a
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According to the table above, the money income distribution is ________ unequal than the market income distribution because ________ income reflects income redistribution through taxes and benefits
A) less; money B) less; market C) more; money D) more; market
When managers do not own very much of the net worth of the firm, then
A) there may be a principal-agent problem. B) the firm will usually have to raise most of its funds in financial markets. C) the firm will have to rely more on equity financing than debt financing. D) the firm will have to rely more on debt financing than equity financing.
The short-run individual supply curve of the perfectly competitive firm is:
a. the upward-sloping portion of its average variable cost curve. b. its average total cost curve. c. its marginal cost curve above average variable cost. d. its marginal cost curve above average total cost.
Suppose that there are two firms, each generating three tons of SO2. Suppose also that the government has set a target abatement level of two tons. Under a policy of uniform abatement with permits, the firm with the lower marginal abatement cost:
A. will abate exactly the same amount of SO2 as the firm with the higher marginal abatement cost. B. will abate less SO2 than the firm with the higher marginal abatement cost. C. will abate more SO2 than the firm with the higher marginal abatement cost. D. will sell its pollution permit to the firm with the higher marginal abatement cost.