Before Walmart's entry into the retail pharmacy business which drove down prices, existing pharmacies
a. were operating efficiently, so this is an example of predatory pricing.
b. were colluding on price, so this is an example of a contestable market.
c. were not operating as efficiently as afterwards, so this is not a case of predatory pricing.
d. did not advertise but were forced to do so by the new competition.
c. were not operating as efficiently as afterwards, so this is not a case of predatory pricing.
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Which of the following statements is correct?
A) PPP is a theory of exchange rate determination. B) Inflation differentials cause changes in exchange rates. C) PPP is an equilibrium relationship between two endogenous variables. D) PPP, or the law of one price, should hold well for individual goods.
Keynesians argue that the interest elasticity of the demand for money is
a. low, while monetarists say it is high. b. unimportant in terms of affecting economic activity, while monetarists disagree. c. relatively high, while monetarists argue it is low. d. not a factor in determining if velocity is stable or unstable.
The price of on-campus parking from 8:00 AM to 5:00 PM, Monday through Friday, is $3.00. From 5:00 PM to 10:00 PM, Monday through Friday, the price is $1.00. At all other times parking is free. This is an example of
A) bundling. B) second-degree price discrimination. C) a two-part tariff. D) tying. E) none of the above
In reality, the long-run supply curve for a perfectly competitive market is upward sloping because:
A. of changing costs of production that firms may face. B. experienced firms will have different information and costs than new firms. C. not all firms have identical cost structures. D. All of these are true.