What is the significance of the mutual interdependence among the firms in an oligopolistic market?
What will be an ideal response?
The assertion that the firms in an oligopolistic market are mutually interdependent means that the decisions of one firm have an effect on the decisions of the other firms in the market. This stems from the fact that each of the dominant firms in the market possesses a relatively large market share. Thus, for example, if firm A decides to raise its price, the other firms are likely to leave their prices unchanged in anticipation of being able to take away part of A's market share. This could result in a significant decrease in A's revenues and a corresponding increase in the revenues received by its competitors.
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Heidi quit her job as a chef making $40,000 per year to start her own restaurant. The first year, Heidi's restaurant earned $100,000 in revenue. Heidi pays $50,000 per year in wages to the waitresses and hostess and $20,000 per year to buy food
What is Heidi's profit as measured by an accountant for the year? A) $80,000 B) $50,000 C) $30,000 D) -$10,000
If planned autonomous investment is 500, autonomous consumption 300, induced consumption 2500, savings 500, and government spending and taxes zero, then
A) Ep is 3300 and the economy is in equilibrium. B) Ep is 3300 and the economy is out of equilibrium. C) Ep is 3500 and the economy is in equilibrium. D) Ep is 3500 and the economy is out of equilibrium.
For a monopolist that does not price discriminate, economic profit is maximized in the short run at a price of $140 . Marginal revenue at that output level is
a. equal to $140 b. greater than $140 c. less than $140 d. less than marginal cost e. greater than average revenue
In Spain, people are considered organ donors unless the explicitly indicate they do not want to be. In the United States, people are only considered organ donors if they explicitly indicate they wish to be. Behavioral economics would suggest that
A) everything else equal, the opt-in system of Spain would generate more organ donors as a percentage of the adult population. B) everything else equal, the opt-in system of the United States would generate more organ donors as a percentage of the adult population. C) everything else equal, the opt-out system of Spain would generate more organ donors as a percentage of the adult population. D) everything else equal, the opt-out system of the United States would generate more organ donors as a percentage of the adult population.