All of the following are true for the leader firm in a Stackelberg oligopoly with a linear demand and marginal cost except which one?
A) The leader earns more profit than the follower second firm.
B) The leader earns more profit than if it operated in a Chamberlin oligopoly.
C) The leader has first-mover advantage.
D) The leader takes the follower second firm's best-response production into consideration when determining its output level.
B) The leader earns more profit than if it operated in a Chamberlin oligopoly.
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If the marginal private cost of producing one kilowatt of power in California is ten cents and the marginal social cost of each kilowatt is fourteen cents, then the marginal external cost equals ________ per kilowatt
A) ten cents B) nineteen cents C) four cents D) zero cents E) fourteen cents
Suppose Mara and David compete, selling fried green tomatoes in a perfectly competitive market. If Mara increases output,
a. David must reduce output b. the price David can charge falls c. the price David can charge rises d. the price David can charge is unaffected e. David's economic profit must fall
The price system is based on the law of __________________.
Fill in the blank(s) with the appropriate word(s).
The usual results of an adverse supply shock are
A. a rise in prices and a fall in output. B. a fall in prices and a rise in output. C. increased growth and lower inflation. D. higher net exports.