An individual firm's best response:
A. is the firm's most profitable choice given the actions of its rivals.
B. is not necessarily selected by all firms in a Nash equilibrium.
C. is always the option with the highest price for each firm.
D. is to set the same price and quantity as all of its rivals.
A. is the firm's most profitable choice given the actions of its rivals.
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Tax policy conducted for the purpose of achieving full employment, price stability, or economic growth is an example of
A) discretionary fiscal policy. B) interest-rate policy. C) monetary policy. D) exchange-rate policy.
Refer to the figure above. The consumer surplus before the tax is imposed is given by the area ________
A) BCJ B) BAH C) CAE D) JBHF
If the quantity supplied responds only slightly to changes in price, then
a. supply is said to be elastic. b. supply is said to be inelastic. c. an increase in price will not shift the supply curve very much. d. even a large decrease in demand will change the equilibrium price only slightly.
A firm has $200 million in total revenue and explicit costs of $190 million. Suppose its owners have invested $100 million in the company at an opportunity cost of 10 percent interest rate per year. The firm's economic profit is:
A. $400 million. B. $100 million. C. $80 million. D. zero.