Which of the following is a necessary condition for government subsidies to influence a firm to choose an output level as if it were a Stackelberg leader?
A) The subsidy must be announced before the firms choose output levels.
B) The subsidy must be equal to the firm's marginal cost.
C) The subsidy must be equal to the firm's rival's marginal cost.
D) The firm does not have any fixed costs.
A
You might also like to view...
A profit-maximizing firm will never hire that quantity of a factor of production for which that factor has an increasing marginal productivity because:
a. it would not be maximizing output. b. it would not be maximizing the productivity of labor. c. it would not be minimizing costs. d. it would not be maximizing profits.
_____ is an arrangement between an attorney and the plaintiff, in which the latter agrees to pay a certain fraction of the money he/she wins to the former
a. Hourly billing b. Capitation c. Contingency d. Unitization
A monopolist is best described as a price
a. taker. b. searcher. c. maker. d. follower.
ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company incurs a cost of 70 cents to produce a dozen eggs. Which of the following price increases would cause both companies to experience an increase in producer surplus?
a. The price of a dozen eggs increases from 40 cents to 55 cents. b. The price of a dozen eggs increases from 55 cents to 70 cents. c. The price of a dozen eggs increases from 55 cents to 75 cents. d. All of these price increases would cause both companies to experience a loss in producer surplus.