Firm 1 and firm 2 compete as a Cournot oligopoly. There is an increase in marginal cost for firm 1. Which of the following is NOT true?
A. Firm 1 will produce less.
B. Both firm 1's and firm 2's reaction functions are shifted.
C. Firm 2 will produce more.
D. Profits of firm 1 will decrease.
Answer: B
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Injections to the economy include consumption, investment, and government spending
a. True b. False Indicate whether the statement is true or false
A monopoly restricts output and charges a higher price than other types of firms
a. True b. False Indicate whether the statement is true or false
The unemployment rate of full-employment is also called the
A. cyclical rate of unemployment. B. natural rate of unemployment. C. frictional rate of unemployment. D. potential rate of unemployment.
Refer to Figure 22.3 for a perfectly competitive firm. Which of the following statements is true for this firm between the prices of $10 and $15?
A. The firm is experiencing economic losses but should continue to produce. B. The firm is experiencing economic losses and should shut down. C. The firm is experiencing zero economic profits. D. The firm is experiencing economic profits because the market price is greater than or equal to the minimum AVC.