What is the potential drawback if firms follow a price leadership model in an actual market?
A) The price leader's behavior may be interpretted as collusion and be subject to antitrust sanctions.
B) Excessive price signalling may force all of the firms to adopt price-taking strategies, which reduces overall profits among the firms.
C) Disputes about which firm should be the price leader may lead to price wars.
D) Signalling efforts increase the firms' fixed costs of production.
A
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The short-run average variable cost curve
a. is always downward-sloping b. starts at the origin and always slopes upward c. starts above the origin and always slopes upward d. is a horizontal line intersecting the vertical axis e. slopes downward at low rates of output, then slopes upward at higher rates of output
A table that shows the relationship between the price of a good and the quantity demanded of that good is called a
a. price-quantity schedule. b. buyer schedule. c. demand schedule. d. demand curve.
Table 34-1 ? Alternate Outputs from One Day’s Labor Input ? Wheat ? Textiles United States ? ? ? (one person’s/day’s labor) 12 bushels or 3 yards ? ? ? ? Great Britain ? ? ? (one person’s/day’s labor) 3 bushels or 12 yards ? From Table 34-1, the opportunity cost of one bushel of wheat in Great Britain is
A. 1/4 yard of textiles. B. 3 yards of textiles. C. 12 yards of textiles. D. 4 yards of textiles.
Interest-rate risk results from:
A. bond prices being fixed over the life of the bond. B. a mismatch between an individual's investment horizon and a bond's maturity. C. inflation being uncertain. D. the fact that most people hold bonds until they mature.