In oligopoly, the actions of one firm have a perceptible effect on the other firms.
Answer the following statement true (T) or false (F)
True
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In using the composite-good convention in an indifference curve diagram, economists
a. compare the prices of market baskets at different points in time. b. divide the world's production into two classes, goods and services. c. divide the world's goods into two classes, high quality goods and low quality goods. d. lump together all goods but one into a single good measured in a single unit, like dollars.
Which of the following barriers to entry can best explain the continued success of a product that has been shown to be, in some way, harmful to the health of consumers?
A) Patent. B) Consumer lock-in. C) Brand loyalty. D) Ownership of an essential resource.
The welfare loss of a tariff equals that of an import quota that leads to the same level of imports
Indicate whether the statement is true or false
Firms may reasonably decide to cut prices if
A. profits are not likely to decline. B. marginal profit is not negative. C. MR > MC. D. All of the responses are correct.