Diversification reduces the risk that ________ face with ________ cost.
A) firms; little to no
B) shareholders; little to no
C) firms; zero
D) shareholders; high
B) shareholders; little to no
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The demand curve for microwave popcorn is linear. Which of the following definitely makes the demand for microwave popcorn more inelastic?
A) a decrease in the price of microwave popcorn B) an increase in the price of microwave popcorn C) an increase in income D) a decrease in income
When a proposed merger between two companies is reviewed by the government, the relevant market is defined by
A) how elastic the demand is for each firm's product. B) how much advertising is done in the industry. C) whether or not there are close substitutes for the products of the two firms. D) counting the number of firms that produce the same product.
When the production of a good results in a positive externality, the social value curve is
a. below the demand curve, indicating that the total value to society is less than the private benefit. b. above the demand curve, indicating that the total value to society is greater than the private benefit. c. identical to the demand curve, indicating that the total cost to society is the equal to the private benefit. d. above the supply curve, indicating that the total cost to society exceeds the private cost.
Refer to the diagram for a noncollusive oligopolist. Suppose that the firm is initially in equilibrium at point E, where the equilibrium price and quantity are P and Q. If the firm's rivals will ignore any price increase but match any price reduction, then the firm's demand curve will be (moving from left to right):
A. D 1 ED 2 .
B. D 2 ED 1 .
C. D 1 ED 1 .
D. D 2 ED 2