Explain what guaranteed price matching means. What are the consequences of such a policy?
What will be an ideal response?
Guaranteed price matching occurs when a firm announces that it will match the price of any other firm who offers their product for a lower price. Although this might seem on the surface to benefit consumers by keeping prices low, in actuality it has the opposite effect. By using a guaranteed price matching strategy, a firm actually ensures that its competitors keep their prices high, which benefits the firms and hurts the consumers.
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Refer to Figure 4-1. If the market price is $4.00, what is the maximum number of ice cream cones that Kendra will buy?
A) 0 B) 2 C) 3 D) 4
Collusion is more successful in a game that will continue forever or in a game with an uncertain ending time, than in a game with a known ending time
Indicate whether the statement is true or false
The government’s role in a laissez-faire system includes
A. determining market prices B. constructing and maintaining roads and infrastructure C. determine the levels of profits earned by firms D. impose minimum wages
People tend to hold more money as the rate of inflation ___ and as the level of income ____.
A. rises; rises B. falls; falls C. rises; falls D. falls; rises