If a monopolistic competitor lowers its price, it will attract a significant number of new customers.
Answer the following statement true (T) or false (F)
False
Because each monopolistically competitive firm has its own captive market- consumers who prefer its particular brand over competing brands-lower prices will not be effective at inducing consumers to switch brands. Instead, imperfectly competitive firms engage in nonprice competition.
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Investment spending is countercyclical
Indicate whether the statement is true or false
Two projects have the following NPVs and standard deviations:
Project A Project B NPV 200 300 Standard deviation 75 100 Which of the two projects is more risky?
Antitrust enforcement of vertical relationships is generally focused on
a. The dominant firm using horizontal contracts to extend market power to other levels of the supply chain b. Vertical contracts increasing the intensity of competition c. Vertical contracts that harm consumers d. All of the above
Over time in the long run we expect unplanned inventory expenditure to:
A. be negative as firms will tend to reduce production is they think people won't purchase their product. B. be positive as on average firms tend to be optimistic about sales, but if they don't sell product they store it. C. equal zero as planned inventories should equal actual inventories. D. increase because firms have a hard time figuring out what consumers want.