Explain how the output effect and the price effect influence the production decision of the individual oligopolist
Since the individual oligopolist faces a downward-sloping demand curve, she realizes that if she increases output, all output must be sold at a lower market price. As such, the revenue from selling the additional units at the lower market price must exceed the loss in revenue from selling all previous units at the new lower price. Otherwise, profits will fall as output (production) is increased.
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Joe, a hair dresser, offers students a discount price on haircuts. This form of pricing is an example of
A) a marginal cost pricing rule. B) an average cost pricing rule. C) price discrimination. D) perfect price discrimination.
Every year, the U.S. allows 500,000 people from developing countries to immigrate to the U.S. permanently, which means:
A. many people resort to immigrating illegally. B. it has a lower rate of acceptance than admission rates to the most competitive U.S. colleges. C. there is a severe surplus, since 13.6 million apply to enter the U.S. D. All of these statements are true.
In economics, choices must be made because we live in a world of
A) unemployment. B) greed. C) scarcity. D) unlimited resources.
The various bundles of goods that a country can obtain by taking advantage of international trade is known as
A) the non-indifference curve. B) the consumption possibility frontier. C) the production possibility frontier. D) the trade possibility frontier.