An In the News article titled "Selling "Pure Water": A $Billion Scam?" refers to the use of advertising. When a firm successfully advertises its product, the firm
A. Has more control over its price.
B. Still has no control over its price because all firms are price takers.
C. Has total control over its price.
D. Has less control over its price.
Answer: A
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An unequal distribution of income is considered fair according to Robert Nozick if
A) marginal cost equals marginal benefit. B) the cost of administering a welfare system is minimized. C) property rights are enforced and voluntary exchange occurs. D) the economy is producing its maximum total output. E) resources are allocated using the command method.
In which of the following market structures with 2 identical firms do both firms produce more than the Cournot outcome?
A) Stackelberg Oligopoly B) Cartel C) Perfect Competition D) None of the above.
If Best Dogs only sells their hot dogs in packages of eight, all of the following are true except which one?
A) Best Dogs is changing consumer surplus into profit. B) Best Dogs is practicing commodity bundling. C) Best Dogs is using an all-or-nothing pricing scheme. D) Best Dogs has market power.
In a past fare war, U.S. Air reduced the price of its Charlotte, North Carolina, to New York City round-trip fare from $198 to $138 to match American Airlines. U.S. Air did so reluctantly, saying it would cost the company millions of dollars in revenue. American, on the other hand, believed the fare cut would increase its revenue. What different assumptions about the underlying price elasticity of demand did each airline believe true?
What will be an ideal response?