In a Cournot oligopoly, if the demand curve is not linear, the firms' best-response curves ________ be downward sloping and ________ be linear.
A) will not; will not
B) will; will
C) will; will not
D) will not; will
C) will; will not
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In the two-period model with asymmetric information, a bank
A) creates money. B) keeps money safely. C) multiplies reserves. D) borrows and lends.
Compared to bondholders, stockholders
a. face higher risk and have the potential for higher returns. b. face higher risk but receive a fixed payment. c. face lower risk and have the potential for higher returns. d. face lower risk but receive a fixed payment.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
Which one of the following would benefit financially from unanticipated inflation?
A. a borrower with an adjustable rate mortgage B. a bank that has made loans at a fixed nominal interest rate C. a firm whose workers are covered by a COLA agreement D. a borrower whose loan has a fixed nominal interest rate