If the leading canned soup company introduces dozens of new flavors in order to dominate shelf space, the company is most likely trying to create a barrier to entry by
a. increasing the total investment needed to reach the minimum efficient size
b. spending more on advertising than potential competitors can afford
c. exploiting economies of scale
d. crowding out the competition
e. establishing an undifferentiated oligopoly
D
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The oligopoly model that is most appropriate when one large firm usually takes the lead in setting price is the ________ model
A) Cournot B) Stackelberg C) game theory D) prisoner's dilemma
Assume Joe invests a total of $10,000 in a company - $5,000 of which is his own money and $5,000 which he borrowed at a 10% interest rate. If the company's stock value increases by 20% in one year at which time Joe sells his shares of the stock, what is Joe's rate of return on his investment?
a. 10% b. 15% c. 20% d. 30%
Use the following graph for a private closed economy (an economy with only a private sector and no international trade) to answer the next question.
At the equilibrium level of real GDP, saving will be
A. $100 billion. B. $50 billion. C. undeterminable from the information given. D. $150 billion.
Publicly provided health insurance for the poor will
A. raise the price of health care to the non-poor. B. increase the total amount of health care consumed. C. raise the price of health care to the non-poor and increase the total amount of health care consumed. D. raise the level of health care consumed by the non-poor.