The above figure shows the payoff to two gasoline stations, A and B, deciding to operate in an isolated town. Suppose a $30 fee is required to enter the market. If firm A chooses its strategy first, then
A) firm A will not enter.
B) neither firm will enter.
C) both firms will enter.
D) firm A will enter and firm B will not.
C
You might also like to view...
Adverse selection in the market for health insurance arises because
A) buyers of insurance know more than insurance companies about the likelihood of an illness for which buyers want insurance. B) the federal government intervenes in insurance markets by controlling prices and reimbursement policies. C) many insurance companies care more about profits than they do about providing services for their customers in the event of illness. D) insurance companies are not allowed to charge premiums that are high enough to insure against "worst-case" illness.
The economic benefits of owning a home are greater when home prices are
a. falling and interest rates are high. b. rising and interest rates are low. c. rising and interest rates are high. d. falling and interest rates are low.
Ashley is an attorney and also an excellent typist. She can type 120 words per minute, but she charges attorney fees at $100 per hour. Benjamin would like some typing work but can only type 60 words per minute. According to the law of comparative advantage, Ashley should hire Benjamin to do her typing if and only if his wage rate is less than
a. $10 per hour. b. $50 per hour. c. $60 per hour. d. $100 per hour.
As the price of cameras increases
A. the demand for cameras will increase. B. the demand for film will increase. C. the demand for film will decrease. D. the supply of cameras will increase.