Criticisms of the Brander-Spencer model include all EXCEPT which of the following?
A) the problem of insufficient information
B) the problem of likely foreign retaliation
C) the problem of harm to interests of consumers
D) the problem of adverse effects of trade policy politics
E) the problem of simultaneously causing harm to other industries
C
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The Coase Theorem explains how the ________ can come to a socially optimal solution.
A. government B. producers C. citizens D. market
Although firms earn zero profits in the long run, why is the outcome from monopolistic competition considered to be inefficient?
A) Price exceeds marginal cost. B) Quantity is lower than the perfectly competitive outcome. C) Goods are not identical. D) A and B are correct. E) B and C are correct.
In the short run, a perfectly competitive firm earning positive economic profit is
A) on the downward-sloping portion of its ATC. B) at the minimum of its ATC. C) on the upward-sloping portion of its ATC. D) above its ATC. E) below its ATC.
The conditions for unaligned retailer and manufacturer incentives include
a. customers are familiar with the product before they shop for it b. retailers have no opportunity to educate consumers c. manufacturers have little scope for educating consumers d. demand for the product is decreased with some consumer education