Chrissy and Marvin are competitors in a local market and each is trying to decide if it is worthwhile to advertise. If both of them advertise, each will earn a profit of $10,000 . If neither of them advertise, each will earn a profit of $20,000 . If one advertises and the other doesn't, then the one who advertises will earn a profit of $30,000 and the other will earn $14,000 . To earn the highest
profit, Chrissy
a. should advertise, and she will earn $10,000.
b. should advertise, and she will earn $30,000.
c. should not advertise, and she will earn 20,000.
d. has no dominant strategy.
d
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Refer to Figure 24-3. Suppose the economy is at point A. If investment spending increases in the economy, where will the eventual long-run equilibrium be?
A) A B) B C) C D) D
Suppose a monopolist is producing a level of output such that MR > MC. What should the firm do to maximize its profits?
A) The firm should do nothing — it wants to maximize the difference between MR and MC in order to maximize its profits. B) The firm should hire less labor. C) The firm should increase price. D) The firm should increase output.
The purchase of Michelin Tire Company by General Motors is an example of a horizontal merger
a. True b. False Indicate whether the statement is true or false
Along the short run aggregate supply curve, if the price level increases, then output will ______
Fill in the blank(s) with the appropriate word(s).