If the demand increases in a perfectly competitive market, firms will likely:
A. experience a loss due to increased competition.
B. set prices artificially higher permanently.
C. enter the market in hopes of capturing some profits.
D. have to engage in more advertising in order to further stimulate the increase in demand.
C. enter the market in hopes of capturing some profits.
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What is a better pricing strategy for the monopolist? At this price, what are the total profits to the monopolist?
a. Bundle the goods at $2,800 . Profits=$5,600 b. Bundle the goods at $4,000 . Profits=$8,000 c. Charge $2,800 for good 1 and charge $1,700 for good 2; Profits=$4,500 d. Charging the lowest price for each good individually is the best pricing strategy; profits = $7,000
An intersection known as Four Corners lies 300 miles from the nearest town. At this intersection are three independently owned gas stations and one small pharmacy. Which of the following is true?
a. The firms are all perfectly competitive because of their size. b. It would be easier for all four firms to form a cartel than for only the gas stations to do so. c. The gas stations are monopolistically competitive because there are so few of them that they are almost monopolists. d. The gas stations are perfectly competitive; the pharmacy is not. e. The gas stations are oligopolists; the pharmacy is a monopolist.
Firm A's motive in filing an antitrust suit against Firm B may be
a. to seek court protection against genuinely unfair practices by Firm B. b. to seek financial compensation for damages caused by Firm B. c. to create an expensive nuisance for Firm B. d. All of the above are correct.
If the long-term labor force growth rate is 1.2% and the long-term productivity growth rate is 2.4%, then the
A. spending multiplier is 2. B. potential growth rate is 3.6%. C. real GDP per capita growth rate is 0.5%. D. short-term growth rate is 1.2%.