Large oligopoly firms are often able to take advantage of significant economies of scale. As a result, they can often produce at a lower average total cost than can smaller firms
a. True
b. False
Indicate whether the statement is true or false
True
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In the market for automobile insurance, moral hazard implies that
A) those who are insured might take greater risks. B) those who are uninsured might take greater risks. C) insured and uninsured alike will take greater risks. D) drivers with greater risks are more likely to buy insurance.
In a competitive market, when price is below the equilibrium level, the price will be driven upward due to
a. excess supply b. government intervention c. competition among suppliers d. excess demand e. technical inefficiency
Matt deposits $150,000 into his bank, which has a required reserve ratio of 15 percent. Matt’s bank must keep ______ of this new deposit in its reserves.
a. $10,000 b. $127,500 c. $150,000 d. $22,500
In an oligopolistic market, each firm
A) has a constant marginal cost. B) faces a perfectly elastic demand function. C) must consider the reaction of rival firms when making a pricing or output decision. D) produces at minimum average cost in the long run.