From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
A) Due to their differences in quality and performance, dealer bicycles are not close substitutes.
B) The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors.
C) Dealers are small sellers and have little control over bicycle prices.
D) A and B are correct.
E) B and C are correct.
D
You might also like to view...
The ________ the portion of your income spent on a good, the ________ is your demand for the good
A) larger; more income elastic B) larger; more price elastic C) smaller; less price elastic D) smaller; more income elastic
Suppose the United States experiences a long period of inflation relative to other countries. How will this affect U.S. net exports?
What will be an ideal response?
Which of the following is the most likely effect of lower apple juice prices on the price and quantity purchased of orange juice, a substitute product?
a. The price of orange juice will increase, and the quantity purchased will fall. b. The price of orange juice will fall, and the quantity purchased will increase. c. The price of orange juice will increase, and the quantity purchased will increase. d. The price of orange juice will fall, and the quantity purchased will fall.
Which of the following examples shows marginal revenue product?
a. The newest staff member, Genevieve, started with a salary of $1,000 per week. b. Stan had sales of $1,000 per week and was paid $700, leaving profit of $300. c. When JP joined the team, the mechanics were able to service six more cars per day. d. A recent hire, Ganesh, added $1,600 per week to the accounting firm’s hourly billing.