vertical integration
What will be an ideal response?
the firm shuns other suppliers and chooses to produce an input internally
reduces opportunism, avoids contracting costs
can cause high organizational cost and lost specialization
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Suppose a start-up company can operate from a traditional office space or from a virtual office in which there is no physical office location and the employees collaborate over internet connections from their individual homes
Shirking is more difficult to monitor under the virtual office plan. How would the efficiency wage and level of employment for the virtual office compare to the traditional office plan? A) Efficiency wage and employment are higher B) Efficiency wage is lower, employment is higher C) Efficiency wage is higher, employment is lower D) Efficiency wage and employment are lower
With a price floor:
A. consumer surplus falls and producer surplus falls. B. consumer surplus increases and producer surplus falls. C. consumer surplus falls and producer surplus can increase or decrease. D. consumer surplus increases and producer surplus increases.
A progressive tax is one in which the fraction of income paid in taxes rises as a person’s income increases.
Answer the following statement true (T) or false (F)
Which statement is true about the monopolistic competitor in the long run?
A. It will be making a profit. B. It will be taking a loss. C. It may be making a profit or taking a loss. D. It will be breaking even.