Sky-High Skywriters temporarily reduces its price when a new firm called The Sky's the Limit Skywriting enters the industry. Sky-High Skywriters is practicing
A. Predatory pricing.
B. Retaliation.
C. Price leadership.
D. Cartel pricing.
Answer: A
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Lowering the discount rate has the effect of ________.
A. forcing commercial banks to call in outstanding loans from their best customers B. turning required reserves into excess reserves C. turning excess reserves into required reserves D. making it less expensive for commercial banks to borrow from central banks
Producers in perfect competition receive a smaller producer surplus than a monopoly producer
Indicate whether the statement is true or false
An industry in which an increase in output leads to a reduction in long-run per-unit costs is a(n)
A) increasing-cost industry. B) constant-cost industry. C) break-even cost industry. D) decreasing-cost industry.
A luxury good has
A) a negative income elasticity. B) a cross elasticity of one. C) a very high income elasticity. D) a negative price elasticity.