A feature of monopolistic competition is:
A. considerable control over price.
B. homogeneous or standardized products.
C. a patent-protected product.
D. nonprice competition.
Answer: D
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Refer to the payoff matrix below. If Camp with Us is known for consistently offering special financing and this is the focal point, what is the equilibrium of the game using the focal point criterion?
Camp with Us and Happy Campers compete in the market for campers. Each firm must decide each season if they are going to offer special financing or not. The above payoff matrix shows each firm's net economic profit at each pair of strategies.
A) Camp with Us Offer Financing and Happy Campers Do Not Offer Financing
B) Camp with Us Offer Financing and Happy Campers Offer Financing
C) Camp with Us Do Not Offer Financing and Happy Campers Do Not Offer Financing
D) Camp with Us Do Not Offer Financing and Happy Campers Offer Financing
The segmenting of customers into several small groups such as household, institutional, commercial, and industrial users, and establishing a different rate schedule for each group is known as:
a. first-degree price discrimination b. market penetration c. third-degree price discrimination d. second-degree price discrimination e. none of the above
Consider the production possibilities frontier in the figure shown. As more and more cigars are produced the opportunity cost of producing more cigars:
A. decreases.
B. stays the same.
C. increases.
D. decreases then increases.
The goal of expansionary monetary policy is to:
A. reduce interest rates to slow down the economy. B. increase interest rates to slow down the economy. C. increase interest rates to stimulate the economy. D. reduce interest rates to stimulate the economy.