With asymmetric information among consumers and positive search costs c, all the other firms in the market are charging a monopoly price Pm. A firm may lower its price
A) by less than c to attract more buyers when there are many firms in the market.
B) by more than c to attract more buyers when there are many firms in the market.
C) by less than c to attract more buyers when there are few firms in the market.
D) by more than c to attract more buyers when there are few firms in the market.
D
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What is rent seeking? How does rent seeking affect the deadweight loss from monopoly?
What will be an ideal response?
If I is gross investment, K is capital stock, and "d" is the ratio of replacement investment to the capital stock, then Tobin's q is
A) q = I/K - d. B) I = Kq + d. C) I/K = j (q - 1 ) = d D) q = I/K (j - 1 ) - d.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period and GDP Price Index remain the same. b. The quantity of real loanable funds per time period rises, and GDP Price Index falls. c. The quantity of real loanable funds per time period rises, and GDP Price Index rises. d. The quantity of real loanable funds per time period falls, and GDP Price Index falls. e. There is not enough information to determine what happens to these two macroeconomic variables.
Economists understand that using statistical discrimination
A. is never rational. B. is always illegal. C. means some individuals are discouraged from acquiring skills. D. All of the above