Refer to the diagram for a noncollusive oligopolist. We assume that the firm is initially in equilibrium at point E, where the equilibrium price and quantity are P and Q. If the firm's rivals will ignore any price increase but match any price reduction, the firm's marginal revenue curve will be (moving from left to right):
A. D 1 ED 2 .
B. MR 2 abMR 1 .
C. MR 2 aMR 2 .
D. MR 1 bMR 1 .
B. MR 2 abMR 1 .
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A sunk cost is one that
a. does not vary with the level of output. b. increases as the firm's production increases. c. measures the value of the firm's self-owned resources. d. can no longer be avoided.
In a recession, consumers have less income to spend. As a result, if dining out is a normal good, then which of the following would happen to the demand curve for dining out?
A) The demand curve would shift leftward. B) The demand curve would not shift but the price of dining out would rise. C) The effect on the demand curve is unknown. D) The demand curve would shift rightward. E) The demand curve would not shift but the price of dining out would fall.
Capital accounts measure
a. the foreign asset holdings of a nation and that nation's asset holding abroad b. d and e c. changes in the foreign asset holdings of a nation and the difference between its exports and imports d. the difference between a nation's exports and imports e. changes in the foreign asset holdings of a nation and that nation's asset holdings abroad
The main reason that firms adjust their output when the price level changes is that
A. uncertainty causes a drop in output. B. taxes cause a supply-side reaction. C. their profit margins change. D. increased risks lead to a change in output. E. All of these responses are correct.