Refer to the normal-form game of price competition in the payoff matrix below.Firm AFirm B??Low PriceHigh Price?Low Price0,050,-10?High Price-10,5020,20What is the maximum interest rate that can sustain collusion?
A. 30 percent
B. 20 percent
C. 66.7 percent
D. 15 percent
Answer: C
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Consider the market for ride-on lawn mowers and the recent increases in the price of oil. The recent increase in the price of oil makes it more expensive to manufacture ride-on lawn mowers. An increase in the price of oil also makes it more expensive to run a ride-on mower. If the price of oil increases, the demand for ride-on mowers will ________ and the supply will ________.
A. decrease; increase B. increase; decrease C. decrease; decrease D. increase; increase
Sources of positive net present value projects include
a. buyer preferences for established brand names b. economies of large-scale production and distribution c. patent control of superior product designs or production techniques d. a and b only e. a, b, and c
Assume the interest rate is 5%. What is the present discounted value of a $1,000 bond that pays a $50 coupon each year for 10 years?
A. $989.91 B. $999.91 C. $1,000.00 D. $1,009.99
Explain how changes in the stock of capital affect aggregate supply