The soft drink market is dominated by Coke, Pepsi, and very few other firms. The firms often start price wars. The market can best be classified as
A. Oligopoly.
B. Perfect competition.
C. Monopolistic competition.
D. Monopoly.
Answer: A
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Which of the following observations is true?
A. Free markets will achieve all of society’s goals. B. The ability to buy goods is divided equally among consumers. C. The market leads to efficiency in production through the profit motive. D. The market system encourages firms to use inputs wastefully.
In perfect competition, an increase in the firm’s fixed costs lead to
A. a drop in the firm’s output. B. an increase in the firm’s output. C. an increase in its total costs. D. a drop in industry output.
A feasible solution to ensure that the sales agents are pricing the merchandise in the firm's best interest and not too aggressively is to
a. Never let them reduce the price b. Let them control the pricing decision independently c. Require the sales agents to obtain permission to reduce price below a specific threshold d. All of the above
Which of the following is the best equation for calculating the growth rate in the standard of living?