In the Hotelling model, what effect would an increase in the transportation cost t have on, in the first instance, a monopoly firm and, in the second instance, two firms located at the extremes of the line segment who compete over the marginal consumer?
a. The monopolist's profit would decrease but the duopolists' would increase.
b. Both monopolist's and duopolists' profits would increase.
c. Both monopolist's and duopolists' profits would decrease.
d. The monopolist's profit would increase but the duopolists' would decrease.
a
You might also like to view...
If capital per hour of labor increases, real GDP per hour of labor
A) decreases for a given level of technology. B) increases because the level of technology increases. C) increases for a given level of technology. D) decreases because the level of technology decreases.
Which of the following government policies would most likely result in an increase in economic growth?
A) a decrease in the life of a patent from 20 years to 15 years B) a decrease in government spending on grants issued through the National Institutes of Health C) a decrease in the interest rate at which the government provides student loans D) decreased copyright protection on music and movies
A possible solution to the network externality problem is the government limiting the size of networks
a. True b. False Indicate whether the statement is true or false
Higher rates of real economic growth can allow a less-developed, low per capita income country to attain the same standard of living as a more developed, high per capita income country in a few years
a. True b. False Indicate whether the statement is true or false