La Dila and Swiss Pro are the only two firms in an industry. The firms initially charge equal prices for their products, which are perfect substitutes. What happens if La Dila decides to lower its price slightly?
A) La Dila will lose all its market share.
B) Swiss Pro will gain market share.
C) La Dila will face the entire market demand.
D) Swiss Pro will earn positive economic profits.
C
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When the price level falls the quantity of
a. consumption goods demanded rises, while the quantity of net exports demanded falls. b. consumption goods demanded and the quantity of net exports demanded both rise. c. consumption goods demanded and the quantity of net exports demanded both fall. d. consumption goods demanded falls, while the quantity of net exports demand rises.
Stabilization policies can best be described as policies that
A. attempt to eliminate recession and/or inflation in the economy. B. use changes in government spending to promote an equitable income distribution. C. use changes in the money supply to lower income tax rates. D. eliminate poverty through the adoption of work incentives.
Which of these is an example of economies of scale?
(A) A restaurant charges customers $1 a glass for water that was once provided for free. (B) A ranch increases its profits by expanding from 400 to 800 cattle without buying or renting additional land. (C) An Internet access company charges customers different rates for using the Internet at different times of day. (D) A shoe store finds it can increase profits by hiring high school students who are willing to work for minimum wage.
The floral industry in Rosevalley has a Herfindahl-Hirschman Index of 900. This implies that the flower market in Rosevalley is ________
A) not concentrated B) moderately concentrated C) highly concentrated D) dominated by a few large buyers