How does a dominant firm try to prevent new competitors from entering the oligopoly market?
The higher the profits of the dominant firm and the existing fringe, the higher the rate at which new fringe members will enter the market. The dominant firm might be able to maximize the present value of its future profits by pricing below the simple single-period maximum. Such low pricing strategy by the dominant firm is referred to as a price war.
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Which of the following statements is true?
A) Arithmetic or geometric growth rates gives similar answers for long periods. B) Using either arithmetic or geometric average to compute average growth rates gives similar answers for short periods. C) Geometric average of growth rate ignores the exponential nature of growth. D) Arithmetic calculation of growth rate considers the exponential nature of growth.
Marla is an architect who is designing a home for Chuck. Chuck is paying Marla $150 per hour to design his new home. When Chuck and Marla get married, Marla continues to work on designing the home, but she no longer charges Chuck for her work
As a result, GDP ________ because ________. A) falls; Marla's architectural design services are no longer bought by Chuck once they're married B) falls; Marla's work becomes less valuable once she's married C) rises; Marla becomes more productive once she's married D) falls; Marla's work takes place in the underground economy once she's married
If speculation is that a recession is around the corner, which means that our future incomes will most likely fall, then the effect of all this on the economy now will be
a. an upward movement along the AD curve b. a downward movement along the AD curve c. the AD curve shift to the left d. the AD curve shift to the right e. the AS curve shift to the right
U.S. imports are most likely to increase when
a. U.S. GDP decreases. b. U.S. unemployment rates fall. c. U.S. prices fall. d. foreign prices rise.