Inelastic demand creates an incentive for suppliers to:
A. stop producing altogether.
B. compete with each other and increase quantity supplied.
C. try to get together and increase quantity supplied.
D. try to get together and limit quantity supplied.
Answer: D
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The Great Depression was made more severe because
A) the government lowered tariffs against imported goods. B) the Federal Reserve increased the money supply after the stock market crashed. C) depositors made runs on banks, thereby destroying the banking system in large parts of the nation. D) depositors left their money in banks instead of increasing spending, which would have increased GDP.
A common characteristic of oligopolies is:
a. interdependence in pricing decisions. b. independent pricing decisions. c. low industry concentration. d. few or no plant-level economies of scale.
An example of a perfectly competitive firm is
A) an oat farmer in the United States. B) the local cable TV company. C) a U.S. automobile producer. D) a big city newspaper.
If a surplus of a product currently exists in the market,
a. the market price is too low. b. the quantity demanded exceeds the quantity supplied at the current price. c. the quantity supplied exceeds the quantity demanded at the current price. d. there is a shortage of the product. e. there will be a tendency for the price to rise.