Cross-subsidization occurs when
A. The government subsidizes production of a product.
B. Profitable firms in an industry are forced to share their profits with the unprofitable firms.
C. Firms are required to subsidize government research and development that may benefit their industry.
D. Profits on one product are used to subsidize low prices on another product.
Answer: D
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Inflation has no effect on an economy's well-being if
A) it is universally and accurately anticipated. B) relative prices are unaffected. C) the nominal rate of interest for both savers and borrowers rises by an amount just equal to the rate of inflation. D) all of these
Identify the reason why U.S. Steel prefers to own iron ore mines
a. It helps them to coordinate iron ore transport and furnace operations. b. It reduces the company's raw material costs. c. It helps them to inspect the quality of the ore. d. It reduces the competition the company faces in the world steel market.
The market allocates goods to individuals according to the individuals’
A. desire for the good. B. ability to pay for the good. C. desire and ability to pay for the good. D. political influence.
For a competitive market,
a. a seller can always increase her profit by raising the price of her product. b. if a seller charges more than the going price, buyers will go elsewhere to make their purchases. c. a seller often charges less than the going price to increase sales and profit. d. a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time.