Predatory pricing:
a. occurs when a firm increases price in order to exploit inelastic demand by consumers
b. occurs when a firm prices below average variable cost in order to drive competitors out of the market.
c. is difficult to distinguish from vigorous competition in practice.
d. is characterized by both (b) and (c).
d
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According to the "rational expectations" school of thought in macroeconomics, the short-run Phillips curve is ________ in face of anticipated changes in monetary policy
A) horizontal B) vertical C) negatively sloped D) positively sloped
Using productive resources to make capital goods requires that we
A) get everyone to agree on the best use of those resources. B) get government approval of our plan to make capital goods. C) forgo some level of current consumption. D) prove that the existence of the capital goods will not cause any environmental damage.
What happens when a price floor is set above the equilibrium price?
a. The quantity demanded will exceed quantity supplied. b. The quantity supplied will exceed the quantity demanded. c. It moves the demand curve. d. It shifts the supply curve.
Which of the following would NOT cause the costs in a monopolistically competitive industry to be higher than those in a perfectly competitive industry?
A. A large number of competitors B. Advertising expenditures C. Marketing costs necessary to differentiate a product D. The ability to control the price of the product so costs can be allowed to rise