The apparent stickiness of the price of goods sold by oligopolists can be explained by the
a. contestable markets model.
b. sales maximization model.
c. kinked demand curve model.
d. entry deterrence model.
c
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The belief that higher taxes on the rich are justified because they have obtained a disproportionately large allotment of the services, infrastructure, and protections the government provides is called
A) utilitarianism. B) diminishing marginal utility. C) the benefits-received principle. D) transcendentalism.
Consider the market for nonalcoholic beers from the previous question. Which of the following is the best-response function for Boors from the Bertrand game?
a. PB = -2.5 + .05PC b. PB = 2.5 + .05PC c. PC = 2.5 - .05PB d. PB = 2.5 - .15PC
If a revenue-maximizing firm is told that the price elasticity of demand is equal to one, it should:
a. raise prices 1 percent. b. lower prices 1 percent. c. raise prices until the elasticity becomes very high. d. keep the price where it is. e. lower prices until the elasticity becomes very high.
Suppose investors become more optimistic that the economy will be doing well over the next decade. How will the market for loanable funds as depicted in the accompanying graph be affected?
A. Supply will shift to the left from S2 to S1. B. Demand will shift to the right from D1 to D2. C. Demand will shift to the left from D2 to D1. D. Supply will shift to the right from S1 to S2.