When manufacturers and distributors establish credible commitments to one another, they often employ
a. vertical requirements contracts
b. third-party monitoring
c. credible threat mechanisms
d. non-price tactics
a
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In order for "limit pricing" to be effective, the firm practicing such a strategy must be able to charge a price that is:
A) lower than the potential entrant's ATC but greater than the firm's own ATC. B) greater than the potential entrant's ATC but lower than the firm's own ATC. C) lower than the potential entrant's ATC but greater than the firm's own AVC. D) greater than the potential entrant's ATC but lower than the firm's own AVC.
Below, the graph on the left shows long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for an increasing-cost industry.
What output will the firm produce?
A. 400 B. 350 C. 300 D. 250
The excise tax on gasoline is based on the ability-to-pay principle of taxation.
Indicate whether this statement is true or false.
An online dating firm is
A) a platform in a shared-input market. B) an end user in a matchmaking market. C) a platform in a matchmaking market. D) an end user in a shared-input market.