The formal game theory model assumes that:
A. the dominant firm in the industry will set product price and other firms will follow.
B. each player tries to anticipate the reaction of his or her rivals when making a decision.
C. each player ignores the possible reaction of his or her rivals when making a decision.
D. markets are contestable when no barriers to entry exist.
Answer: B
You might also like to view...
Microeconomics and macroeconomics use different types of analysis
a. True b. False Indicate whether the statement is true or false
If zinc suppliers are successful in forming an international zinc cartel, they will
a. lower output and raise prices, which discourages the entry of new firms into the industry. b. lower output, raise prices, and have a need to prevent the entry of new firms into the industry. c. raise output and raise prices, which discourages the entry of new firms into the industry. d. raise output, raise prices, and have a need to prevent the entry of new firms into the industry.
For monetarists, the main cause of economic fluctuations is represented by changes in
a. the levels of household debt. b. investment. c. the growth rate of the quantity of money. d.consumption expenditure.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.