In the kinked-demand model of a noncollusive oligopoly, if one firm decreases its price, the most likely reaction of the other firms will be to:
A. increase their prices.
B. not change their prices.
C. decrease their prices.
D. fix prices.
Answer: C
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Wealth
A) is the same as income. B) includes assets such as houses, stocks, and bonds. C) does not include tangible objects. D) is a flow and not a stock.
Government gives subsidies to encourage production of products with beneficial externalities
a. True b. False Indicate whether the statement is true or false
Above-normal profits earned by existing firms in a perfectly competitive market will eventually lead to:
a. exit of the firms from the market. b. an increase in the market price of the good. c. entry of new firms into the market. d. a decrease in the aggregate supply. e. the existing firms emerging as price makers.
Carson Manufacturing uses sharp but temporary price cuts to discourage new competition in the widget market. Which barrier to entry is used by Carson Manufacturing?
a. Predatory pricing b. Price skimming c. Economies of scale d. Deregulation