The reason why weaker firms accept price leadership is that they
a. maximize profit that way
b. get an equal share of the market
c. can collude to eventually challenge the dominant firm
d. are protected from price competition
e. can lower their prices to increase market share without upsetting the price leader
D
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A great deal of damage is done to the environment in the urban U.S. because
A) a system based on private property cannot provide for a common environment. B) few people understand the economics of pollution. C) many and perhaps most people assign little or no value to a pleasant environment. D) the environment is treated as everyone's property and therefore as no one's property. E) the United States has no central planning.
An important problem facing the Fed is that
A) the goals for economic growth and price stability may conflict in the short run. B) it lost effective control over the monetary base. C) it has been given responsibility for meeting policy goals, but true control over monetary policy remains with Congress. D) it has been given responsibility for meeting policy goals, but true control over monetary policy remains with the President.
A monopolistically competitive industry has
A. a differentiated product and significant barriers to exit and entry. B. a differentiated product and the ability to make a long-run profit. C. a differentiated product and a small influence over price. D. identical products and ease of exit and entry.
When an economics student draws a supply and demand diagram to model an increase in the income, she is assuming this change happens
A. ceteris paribus. B. ipso facto. C. semper fidelis. D. de facto.