Under oligopoly, a kinked-demand curve would explain why firms:
A. undertake new investment.
B. are approximately the same size.
C. avoid price wars.
D. have different levels of efficiency.
Answer: C
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Countries with large amounts of capital per worker tend to have ________ levels of real GDP per person and ________ levels of average labor productivity.
A. low; low B. low; average C. high; low D. high; high
The returns to scale in the production function Y = K0.5 L0.5 are:
A. decreasing. B. constant. C. increasing. D. subject to wide fluctuations.
_________ are defined as quantitative and/or qualitative criteria that reconcile resources with demands and serve as measures of values and goals
a. Attitudes b. Mid-level processes c. Standards d. 5-S principles
Max and Maddy charge people to park on their lawn while attending a nearby craft fair. At the current price of $10, seven people park on their lawn. If they raise the price to $15, they know that only five people will want to park on their lawn. Whether they have seven or five cars parked on their lawn does not affect their costs. From this information it follows that
a. they should leave the price at $10. b. it does not matter if they charge $10 or $15. c. they would do better charging $15 than $10. d. they should raise the price even more.