What happens to a monopolistically competitive firm that begins to change an excessive price for its product?
a) The firm will go out of business
b) Consumers will substitue a rival's product
c) Consumers will boycott the product
d) The government will regulate the price
Ans: b) Consumers will substitue a rival's product
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The price of iPhones has fallen dramatically. Which of the following is likely to happen?
A) The quantity of iPhones supplied will increase. B) The supply of iPhones will increase. C) The quantity of iPhones supplied will decrease. D) The supply of iPhones will decrease.
The firms in the petroleum industry of Oiland have decided to cooperate with each other by setting their respective market shares. This is an example of ________ in the petroleum industry
A) cost cutting B) undercutting C) collusion D) free riding
Average cost equals total cost multiplied by the number of units of output
a. True b. False Indicate whether the statement is true or false
Total profit is maximized if the slope of the total profit curve is
a. positive. b. negative. c. increasing. d. zero.