The subgame-perfect equilibrium of a two-stage game in which firms first choose capacities and then engage in a Bertrand price setting game resembles the equilibrium in:
a. the competitive model.
b. the Cournot model.
c. the cartel model.
d. the price leadership model.
b
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A compulsory payment to government that is generally linked to engaging in some activity is referred to as a
A) tax. B) subsidy. C) deadweight loss. D) quota.
The infant industry argument for protectionism suggest that an industry must be protected in the early stages of its development so that: a. firms will be protected from subsidized foreign competition
b. domestic producers can attain the economies of scale to allow them to compete in world markets. c. there will be adequate supplies of crucial resources in case they are needed for national defense. d. domestic unemployment will be reduced.
The monopolist faces a downward sloping demand curve, and maximizing profits requires the monopolist to
A) accept the market price for its product. B) will produce where the demand curve is inelastic. C) search for the price consistent with producing to the point at which marginal revenue equals marginal cost. D) search for the highest possible price consistent with maximizing its revenues, irrespective of its explicit and implicit opportunity costs.
The GDP is the:
What will be an ideal response?