A group of producers that agree to set common pricing or output goals is known as a
A) cartel.
B) conglomerate.
C) perfect competitor.
D) monopoly.
Answer: A
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Which of the following is NOT true of a demand curve?
A. It reflects sellers' reservations prices. B. It shows the amount consumers want to buy at various prices. C. It has negative slope. D. It relates the price of an item to the quantity demanded of that item.
Suppose a monopolist offers a $20 mail-in rebate on an item with a list price of $100. In order for the rebate to be a perfect hurdle, it must be the case that:
A. buyers use the rebate if and only if their cost of filling out the rebate is less than $20. B. all buyers with a reservation price greater than $80 use the rebate. C. some buyers with a reservation price greater than $80 use the rebate. D. buyers use the rebate if and only if they have a reservation price between $80 and $100.
Suppose a market is currently served by an incumbent firm. If a potential entrant can enter prior to the incumbent firm announcing its output (or price), the incumbent cannot deter entry through its actions.
Answer the following statement true (T) or false (F)
The efficient markets hypothesis suggests that if an unexploited profit opportunity arises in an efficient market
A) it will tend to go unnoticed for some time. B) it will be quickly eliminated. C) financial analysts are your best source of this information. D) all profits will be eliminated through taxation.