The above figure shows the payoff to two gasoline stations, A and B, deciding to operate in an isolated town. If firm A chooses its strategy first, then
A) firm A will not enter.
B) firm B's entry is blockaded.
C) both firms will enter.
D) firm A will enter and firm B will not.
C
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Classical growth theory asserts that
A) growth in real GDP per person is temporary. B) only some countries can have economic growth. C) real GDP growth will eventually be a constant 3 percent per year. D) nominal GDP growth is most important.
Which of the following describes a situation in which demand must be inelastic?
a. Total revenue decreases by 10 percent when the price of spats rises by 10 percent. b. Total revenue decreases by less than 10 percent when the price of spats rises by 10 percent. c. Total revenue increases by more than 10 percent when the price of spats rises by 10 percent. d. Total revenue decreases by $10 when the price of spats rises by $10. e. Total revenue decreases by more than $10 when the price of spats rises by $10.
If nominal GDP = $900 billion and the public holds $300 billion in M2, then the velocity of the M2 money supply is
A) 1. B) 2. C) 3. D) 4.
Which of the following is true of a change in nonlabor income?
A. There is no income effect because a change in nonlabor income does not change a household's permanent income. B. There is no substitution effect because a change in nonlabor income does not change a household's permanent income. C. There is no income effect because a change in nonlabor income does not change the trade-off between work and leisure. D. There is no substitution effect because a change in nonlabor income does not change the trade-off between work and leisure.