Effective limit pricing between one incumbent firm and one potential entrant involves:
A. the incumbent linking the pre-entry price to post-entry profits only.
B. the incumbent linking the pre-entry price to post-entry profits and the incumbent reducing price below the monopoly price to prevent entry.
C. the incumbent reducing price below the monopoly price to prevent entry only.
D. None of the statements are correct.
Answer: B
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The relationship between the labor employed by a firm and the real wage rate is shown by the
A) supply of labor curve. B) supply of jobs curve. C) demand for jobs curve. D) demand for labor curve.
The kinked demand curve model explains pricing in monopoly markets.
Answer the following statement true (T) or false (F)
An increase in supply will occur when
A) the supply curve shifts downward to the right. B) the supply curve shifts upward to the left. C) the demand curve shifts downward to the left. D) the demand curve shifts upward to the right.
For a cost function C = 100 + 10Q + Q2, the average variable cost of producing 20 units of output is:
A. 20. B. 10. C. 30. D. None of the answers are correct.