Negative market feedback refers to a tendency for
A. one or two firms in an oligopolistic industry to respond to price decreases by initiating efforts to engage in price leadership.
B. the dominant firm in an oligopolistic industry to react to competing firms' price increases by decreasing the price of its own product.
C. price wars to break out in oligopolistic industries in which firms produce products possessing characteristics that make them prone to network effects.
D. a particular product to fall out of favor with additional consumers because other consumers have stopped purchasing the product.
Answer: D
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In the short run, a price increase in the goods and services market measured by the CPI will: a. increase the purchasing power of money
b. improve producer profits and, thereby, induce suppliers to expand output. c. increase resource prices, lower profits, and lead to a decline in output. d. reduce the natural rate of unemployment.
Suppose a firm's short-run production function is given by Q = F(L) = 4L. If the wage rate is $12 and the firm has sunk costs of $300, then the firm's cost function is:
A. C(Q) = $12L. B. C(L) = $300 + $3L. C. C(Q) = $300 + $3Q. D. C(Q) = $300 + $12Q.
Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that
a. if Canada were to allow trade, it would export hockey sticks. b. Canada has an absolute advantage, relative to other countries, in producing hockey sticks. c. Canada has a comparative advantage, relative to other countries, in producing baseball bats. d. All of the above are correct.
Total utility can be positive even when marginal utility is negative.
Answer the following statement true (T) or false (F)