Suppose that you have noticed that almost all of the car dealers in your city are located along a three-block stretch of the same street. A likely reason for this clustering of car dealers is that:
A. there is a social norm in that city that dealers follow in choosing location.
B. each dealer is attempting to locate closest to the customers.
C. each dealer sells a different brand of car, so they are not competitors and do not have to be concerned about the other dealers' locations.
D. the dealers are better able to form a cartel.
Answer: B
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Why might it be a bad idea to engage in first-degree price discrimination?
A. Price discrimination is illegal and can lead to lawsuits and lost customers. B. The information needed does not exist and scarce resources should not be used searching for it. C. Price discrimination in any form is not viable for most companies as a way to increase profits. D. The information needed can be costly and can lead to decreased profits for the company.
One reason more sport utility vehicles (SUVs) are driven in the United States than in Europe is
A) different marginal rates of substitution. B) different marginal rates of transformation. C) the United States hasn't had a recession since 2000-2001. D) Either A or B
You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west. Your first step would be to
a. decide which direction to shift the curve. b. decide whether the fires affected demand or supply. c. graph the shift to see the effect on equilibrium. d. None of the above is correct.
When a country allows trade and becomes an exporter of a good, which of the following is not a consequence?
a. The price paid by domestic consumers of the good increases. b. The price received by domestic producers of the good increases. c. The losses of domestic consumers of the good exceed the gains of domestic producers of the good. d. The gains of domestic producers of the good exceed the losses of domestic consumers of the good.