Because firms selling a homogeneous product set price in response to the (perceived) pricing decision of other firms in the Bertrand Model of oligopoly in equilibrium price exceeds marginal cost
Indicate whether the statement is true or false
False. Because firms set price and sell a homogenous product other firms will always set price lower if a firm prices above marginal cost. In equilibrium all firms charge P = MC (same as the competitive equilibrium).
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When the price of ice cream rises from $3 to $5 a scoop, the quantity of ice cream bought decreases by 10 percent. The price elasticity of demand for ice cream is _______
A. 5 B. 0.2 C. 50 D. 2.5
The unemployment rate is computed by ________
A) dividing labor force by the adult population B) dividing the number of unemployed by the adult population C) multiplying the employment ratio by the adult population D) dividing the labor force by the number of unemployed E) none of the above
In Egypt, in 1970, the Aswan Dam was completed. By preventing the annual flood of the Nile (thereby providing millions of acres of arable land) and by providing electricity, the dam was expected to raise the living standard of the Egyptian people-and it has. However, it has also led to a rise in the water table which causes Egypt's limestone structures, including the pyramids, to absorb more salt
water and to suffer serious erosion from crystallized salts. Combined with air pollution and traffic vibration, this erosion is turning the pyramids to dust. Economists analyze this type of problem with the concept of a. an externality. b. the antiquity problem. c. a free-rider problem. d. the public good problem. e. the trade-off between equity and output.
____________ has settled four different allegations for illegal pharmaceutical marketing activities since 2002.
Fill in the blank(s) with the appropriate word(s).