The law of demand states that:
a. as the price of a good increases, more units are demanded.
b. there is a direct relationship between the price of a good and the quantity of the good produced.
c. there is a negative relationship between the price of a good and the quantity of the good demanded.
d. there is an increase in the need for a good as the price of the good increases.
c
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Suppose that Industry X has two firms with equal market shares, and Industry Y has three firms with 65 percent, 30 percent, and 5 percent market shares, respectively. Which of the following is TRUE?
A) The HHI for Industry X is 50 higher than the HHI for Industry Y. B) The HHI for Industry X is 150 lower than the HHI for Industry Y. C) The HHI for Industry X is 100 higher than the HHI for Industry Y. D) The HHI is the same between Industry X and Industry Y.
Which of the following is true of Regression Specification Error Test (RESET)?
A. It tests if the functional form of a regression model is misspecified. B. It detects the presence of dummy variables in a regression model. C. It helps in the detection of heteroskedasticity when the functional form of the model is correctly specified. D. It helps in the detection of multicollinearity among the independent variables in a regression model.
Evaluate the following statement: "The market price of a good reflects its highest-valued alternative use."
Indicate whether the statement is true or false.
Entry deterrence is always the best strategy for a monopolist.
Answer the following statement true (T) or false (F)