The market pricing system corrects an excess supply by.
a. raising the product price and increasing producer profits.
b. lowering the product price and decreasing producer profits.
c. raising the product price and decreasing producer profits.
d. lowering the product price and increasing producer profits.
Ans: b. lowering the product price and decreasing producer profits.
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The magnitude of the slope of an indifference curve is the marginal
A) rate of substitution. B) rate of relative prices. C) utility of substitution. D) rate of utility of income.
The main result of the monetarist model is that
A) the economy is slow to adjust to sticky wages and prices. B) workers and firms have rational expectations. C) the quantity of money should be increased at a constant rate. D) productivity shocks explain fluctuations in real GDP.
One reason why the smaller oligopolistic firms accept godfather pricing in unbalanced oligopoly is because they can
a. differentiate their products more fully in order to increase market power b. engage in mergers if the godfather chooses the wrong price c. together influence the price leader (godfather firm) to share industry profit more equally d. enjoy a higher economic profit than they would otherwise e. survive a price war without too many losses
When the government levies a tax on a corporation,
a. all the burden of the tax ultimately falls on the corporation's owners. b. the corporation is more like a tax collector than a taxpayer. c. output must increase to compensate for reduced profits. d. less deadweight loss will occur since corporations are entities and not people who respond to incentives.