Oligopolists need to consider:
A. the price effect.
B. the supply effect.
C. the substitution effect.
D. the income effect.
Answer: A
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Suppose the table below describes the demand for a good produced by monopolist.PriceQuantity$101$92$83$74$65$56$47The monopolist's marginal revenue from selling the 4th unit of output is less than $7 because:
A. demand is perfectly elastic. B. marginal cost is greater than $3. C. the consumer only pays $4 for the 4th unit. D. it has to charge $1 less for each of the first 3 units of output.
If the income elasticity of potatoes is -0.7, then the income effect caused by a price decrease of potatoes
A) tends to increase the consumption of potatoes. B) tends to decrease the consumption of potatoes. C) is less than the substitution effect. D) None of the above.
Joe's hotdog stand merges with a company that supplies the condiments to Joe's. This is an example of
A) conglomerate merger. B) concentration ratio. C) vertical merger. D) horizontal merger.
Which of the following statements about international trade restrictions is true?
a. They ensure that only efficient producers survive. b. They ensure that countries specialize only in those products that they can produce most efficiently. c. They harm domestic consumers in the majority of cases. d. They typically benefit foreign producers at the expense of domestic consumers. e. They ensure that higher-quality goods are provided at lower prices.