Which of the following is true regarding the relationship between the elasticity of demand for an individual firm and the elasticity of demand for the market in a Cournot oligopoly with five identical firms?
A. EF = (1/5)EM
B. EF = (df(p)/dP) × (5P/Q)
C. EF = (df(p)/dP) × (5Q/P)
D. EM = 5EF
Answer: B
You might also like to view...
In 2008, the Treasury and Federal Reserve took action to save large financial firms such as Bear Stearns and AIG from failing. Which of the following is one reason why these measures were taken?
A) The bankruptcy of a large financial firm would force the firm to sell its holdings of securities, which could cause other firms that hold these securities to also fail. B) The Emergency Economic Stabilization Act required the Fed and the Treasury to provide financial assistance to firms that participated in regular open market actions with the Fed. C) The failure of these firms would have forced the Fed to increase interest rates, which could have led to a severe recession. D) The Fed and the Treasury wanted to allow Freddie Mac and Fannie Mae more time to buy the firms before they went bankrupt.
The U.S. government will probably return soon to a system of paper money backed by gold
a. True b. False Indicate whether the statement is true or false
The largest sector in the consumer price index market basket is food and beverage purchases
a. True b. False Indicate whether the statement is true or false
According to classical economic theory
A. deficit financing is the only effective remedy for recession. B. fiscal policies are more effective than monetary policies as economic stabilization tools. C. if the economy is experiencing excessive inflation, the government should raise taxes and/or cut expenditures. D. falling wages and prices would be the natural cure to recession.