One of the characteristics of a contestable market is that:
A. existing firms respond quickly to entry by lowering their price.
B. consumers react quickly to a price change.
C. all firms have different productive technology.
D. there are sunk costs.
Answer: B
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When costs are at a minimum,
A. the ratio of the MPL/MPK < Price L/Price K. B. MPL = MPK. C. Price L = Price K. D. the extra output we get from the last dollar spent on an input must be the same for all inputs.
Exhibit 7-14 Cost curves
In Exhibit 7-14, constant returns to scale only exist for output levels between:
A. 0 and 1,000. B. 1,000 and 2,000. C. 2,000 and 3,000. D. 3,000 and 4,000.
A Nash equilibrium occurs when each player in a game takes the ________ given the action of the other player
A) worst possible action for himself or herself B) best possible action for himself or herself C) most unpredictable possible action D) most mutually beneficial possible action E) best possible action for the other player
A marginal cost pricing rule sets marginal cost equal to
A) minimum average variable cost. B) price. C) average cost. D) marginal revenue. E) the smaller of price or marginal revenue.