The conclusion that firms in oligopoly always produce where price exceeds marginal cost is true for all models of oligopoly except the
A. price-leadership model.
B. collusive oligopoly model.
C. Cournot model.
D. contestable market model.
Answer: D
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People have a strong incentive to form rational expectations because
A) they are guaranteed of success in the stock market. B) it is costly not to do so. C) it is costly to do so. D) everyone wants to be rational.
Nash equilibria are stable because
A) they involve dominant strategies. B) they involve constant-sum games. C) they occur in noncooperative games. D) once the strategies are chosen, no players have an incentive to negotiate jointly to change them. E) once the strategies are chosen, no player has an incentive to deviate unilaterally from them.
The Sherman Antitrust Act of 1890
a. immediately reduced the number of trusts and the incidence of anticompetitive behavior b. established the Antitrust Division of the Department of Justice c. did not apply to farmers d. was not fully enforced at first e. prohibited price discrimination
Microeconomics approaches the study of economics from the viewpoint of:
a. inflation, unemployment, and economic growth. b. the federal government. c. individual economic units, such as consumers, firms, and units of government. d. the economy as a whole.