Firms will try to signal superior quality of their goods by:
A. advertising.
B. making sales information available to the public and advertising.
C. issuing warranties or guarantees.
D. making sales information available to the public.
Answer: C
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An increase in demand will have what effect on equilibrium price and quantity?
A. Price will increase; quantity will decrease. B. Price will decrease; quantity will increase. C. Both price and quantity will increase. D. Both price and quantity will decrease.
A natural oligopoly can form
A) if there are economies of scale. B) only if firms sell a differentiated good. C) only if firms sell a homogeneous good. D) if there is only one firm in the industry.
The use of a two-part price in a regulated natural monopoly
A) maximizes the deadweight loss. B) allows the firm to maximize profits. C) may make it possible for the firm to obey a marginal cost pricing rule and not go out of business. D) All of the above answers are correct.
In the financial crisis in 2008, the Federal government created the ________, to purchase financial assets that were thought to be temporarily undervalued, preventing further financial panic
A) Federal Home Loan Board. B) Troubled Asset Relief Program. C) Federal Deposit Insurance Corporation. D) Bank Insurance Fund.