For a number of years, General Motors used a pricing strategy designed to maintain at least 40 percent of the American car market. Does this strategy suggest that GM was maximizing profits or pursuing an alternative strategy?
Pursuing market share is not the same thing as profit maximization. Pricing for maximum profit might have given GM less than a 40 percent share of the market. To increase sales, GM would have had to reduce price below the profit-maximizing price. However, GM might have thought that maintaining significant market share would help preserve their profitability in the face of foreign competition in the long run
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Which factor of production earns most income in the United States?
A) capital B) labor C) money D) entrepreneurship
Purchasing a season pass to the local symphony
A) is an example of first degree price discrimination. B) is an example of second degree price discrimination. C) is an example of third degree price discrimination. D) All of the above.
If the cross price elasticity of demand between two commodities is positive, then these commodities are
A) are superior. B) are complements. C) are substitutes. D) are inferior.
Which term is synonymous with a perfectly competitive firm?
a. Price taker b. Oligopoly c. Private enterprise d. Monopoly