Too many dollars chasing too few goods is a description of _____ inflation.
Fill in the blank(s) with the appropriate word(s).
demand-pull inflation
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Managerial economics is best defined as
A) the study of economics by managers. B) the study of the aggregate economic activity. C) the study of how managers make decisions about the use of scarce resources. D) All of the above are good definitions.
Two firms compete in a market by selling imperfect substitutes. The demand equations are given by the following equations:
Q1 = 50 - p1 + p2 Q2 = 50 - p2 + p1 For now, assume that each firm has a marginal cost and average cost of 0. a. From the equations, how can you tell these goods are substitutes? How can you tell they are imperfect substitutes? b. Suppose the firms compete by simultaneously choosing price. Find the best response function of each firm as a function of the other firm's price. c. Compute the equilibrium price and quantity for each firm. d. Suppose firm 1 (and only firm 1 ) had a marginal and average cost of $10. How would the equilibrium change? How does this compare to the Bertrand result when the firms sell perfect substitutes?
How is money destroyed in the banking system?
Any costly activity firms undertake to protect their monopoly status is referred to as
a. market power b. price-setting behavior c. rent seeking d. economies of scale e. legal intervention