If all firms in perfect competition have the same average revenue and pay the same price for inputs such as labor and materials, why do they not all have the same profit?
What will be an ideal response?
ANS:
Some firms are more efficient in the use of labor and materials. Consequently, they may have a lower average total cost curve than other firms, resulting in a higher profit. Others may be operating at a larger scale, thus having a lower average total cost curve.
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Refer to the table below. Pat's opportunity cost of delivering a pizza is making: Pizzas MadePer HourPizzasDeliveredPer HourCorey126Pat1015
A. 12 pizzas B. 2/3 of a pizza C. 3/2 of a pizza D. 10 pizzas
When an airline reduces its fares, other airlines typically match the action. But when an airline increases its fare, other airlines do not follow suit. Which oligopoly model cartel, price leadership, or kinked demand best fits the airline industry as described? Justify your choice and explain why the other models are less appropriate.
What will be an ideal response?
Empirical analysis uses ______ to test a hypothesis.
a. subjectivity b. data c. rationality d. correlation
If one of the nation's leading banks raises the prime rate of interest by a half of a percent, and within 24 hours all of the other U.S. banks raise their prime rates by the same percentage, this behavior would be
A. an example of covert collusion. B. proof of the U.S. bank cartel at work. C. an example of illegal cutthroat price competition at work. D. an example of price leadership.