The theory of the kinked demand curve is that
a. although the firm sells a differentiated product, too many competitors exist to make it worthwhile speculating on responses to the firm's behavior.
b. freedom of entry will reduce profits to zero.
c. a firm's competitors will follow it in a price decrease but not follow it in a price increase.
d. firms are all seeking the position of joint profit maximization.
c
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The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, what is the rent?
A) $800 B) $600 C) $400 D) None of the above answers is correct.
A medical doctor who works for a state -owned hospital in Greece ________ a government official and a U.S. firm bribing the doctor ________ illegal under the Foreign Corrupt Practice Act (FCPA).
A) is; is B) is not; is C) is; is not D) is not; is no
When a single firm in an oligopoly market decides to increase output, that firm:
A. feels the quantity effect, but other firms feel the price effect. B. feels both the quantity effect and price effect, but other firms only feel the price effect. C. feels the price effect, but other firms feel the quantity effect. D. feels the price effect, but other firms feel both the price and quantity effects.
Predictions of severe shortages due to impending natural resource depletion
a. are widely accepted by resource economists even though such predictions are a relatively new occurrence. b. have been wrong in the past, but most resource economists believe that the threat of resource depletion is now far more severe than ever before. c. are typically made without adequate recognition and consideration of resource price elasticities. d. typically assume that price elasticities are greater than they really are.