In a franchising relationship
a. the franchisor is the local businessman or businesswoman
b. the corporate brand owner contracting with local operator is the franchisor
c. the local operators are the franchisors
d. the corporate brand owner contracting with local operators is the franchisee
b
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Two identical firms have access to a spring. Their marginal cost of bottling water from the spring is a constant 10ยข per bottle. The market demand for bottled spring water is P = 250 - 20Q, where P is the price (in cents per bottle) and Q is the quantity demanded (in hundreds of bottles).
(i) Suppose the two firms form a successful cartel. How much bottled water will the firms produce, and what price will they charge? (ii) Suppose the firms behave as in the Bertrand model of oligopoly. How much bottled water will the firms produce, and what price will they charge? (iii) Suppose the firms behave as in the Cournot model of oligopoly. How much bottled water will the firms produce, and what price will they charge?
Pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?
A) The demand for pizzas decreases and the demand for tacos increases. B) The demand for both goods decreases. C) The quantity of tacos demanded increases and the quantity of pizza demanded decreases. D) The quantity of pizza demanded decreases and the demand for tacos increases. E) The demand for each decreases because both are normal goods.
Refer to Figure 7-5. If consumers paid the full price of medical services, the price they would pay is
A) $40. B) $55. C) $65. D) > $65.
The term "open market operations" refers to the:
a. loan-making activities of commercial banks. b. effect of expansionary monetary policy on interest rates. c. operation of competitive markets in the banking industry as the result of deregulation. d. buying and selling of government securities by the Federal Reserve.