When large firms in oligopolies cut their prices
A) rival firms will also cut their prices to avoid losing sales.
B) rival firms will not change their prices because most of their customers have signed contracts that commit them to doing business with the same firms for the life of their contracts.
C) we don't know for sure how rival firms will respond.
D) rival firms will not cut their prices because they fear that the federal government will accuse them of collusion.
Answer: C
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Which firm has higher marginal costs?
a. Jim's Production b. Competitor's production c. They both have the same fixed costs d. Need more information
The concept of opportunity cost is illustrated by: a. a movement from the interior of the production possibilities curve to the frontier
b. a movement from the production possibilities curve to its interior. c. a movement from a point on the production possibilities curve to the northeast. d. a movement along the production possibilities curve, as production of one good falls in order to increase production of another.
The idea that the desires of resource suppliers and producers to further their own self-interest will automatically further the public interest is known as:
a. Profit maximization b. Derived demand c. Consumer sovereignty d. The invisible hand
The basic dividend-discount model is a bit of an oversimplification for valuing stocks because it:
A. ignores the value of future dividends. B. ignores the risk involved in holding stocks. C. cannot handle stocks that do not pay dividends. D. ignores expected dividend growth.