Predatory pricing occurs when a firm
a. exercises its oligopoly power by raising its price through the formation of a cartel.
b. exercises its monopoly power by raising its price.
c. cuts its prices in order make itself more competitive.
d. cuts its prices temporarily in order to drive out any competition.
d
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The aggregate supply curve will be vertical when:
a. output can be increased without an increase in the price level. b. the economy is operating at full-employment capacity. c. output and price level rise together. d. the aggregate demand curve is shifting to the left. e. aggregate demand is absent.
The difference between the value of a good to consumers and its price is known as: a. demand
b. marginal utility. c. total utility. d. consumer surplus.
If both supply and demand decrease and the shift in demand dominates, which of the following happens? a. The equilibrium quantity increases. b. The equilibrium price and the equilibrium quantity decrease. c. The equilibrium price decreases and equilibrium quantity increases. d. The equilibrium quantity increases and the equilibrium price change is indeterminate
e. The equilibrium price increases and the equilibrium quantity decreases.
In the basic 45-degree line model, what is the effect of a decrease in the price level?
a. The expenditure line will shift downward. b. The expenditure line will shift upward. c. There will be movement to the left on the expenditure line. d. There will be movement to the right on the expenditure line.