Suppose the market clearing price is $10 and the price ceiling is $8. The price that prevails in the market will be
A. $8.
B. $0.
C. $10.
D. less than $8.
Answer: A
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Two competing firms in a duopoly must decide whether or not to offer consumers a coupon for their good. The payoff matrix above represents the daily profit available to the firms under the different coupon strategies
a. What strategies and payoffs are represented by quadrant A? b. What strategy will Firm 1 pursue if it believes that Firm 2 is offering a coupon? c. What quadrant represents the equilibrium that will result if the firms act independently (compete)? d. What quadrant represents the equilibrium that will result if the firms successfully collude?
Monopolies charge
a. the highest possible price b. a price determined by cost c. the price consistent with the output level where total revenue equals total cost d. the price associated with the quantity at which marginal revenue equals marginal cost e. the price at which total revenue equals average total cost
If you put $300 into an account paying 2 percent interest, what will be the value of this account in 4 years?
a. $320.69 b. $324.00 c. $324.73 d. $327.81
Suppose there are two parallel highways between two cities with approximately equal traffic. What would you expect to happen if the state began charging tolls to drive on one of those highways?
A. Traffic would decrease on both roads. B. More drivers would drive on the non-toll road, making the toll road less congested. C. More drivers would drive on the toll road making the non-toll road less congested. D. Traffic would remain evenly divided between the two roads as drivers continuously sought the less-congested route.