In a competitive market with large search costs, many firms, and asymmetric information, why is the monopoly price the only possible single-price equilibrium?
What will be an ideal response?
If firms all sell for some price below the monopoly price, then any one firm can benefit by raising price by less than the cost of searching. All firms have this incentive, which disappears when the monopoly price is set. At the monopoly price, any change in price will lower profit.
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Referring to the graph above, an economic variable that had peaked in December 1911, November 1914, and February 1919 is likely a ________ variable
A) leading countercyclical B) leading procyclical C) lagging countercyclical D) lagging procyclical E) none of the above
A price change triggers the income effect but not the substitution effect
a. True b. False Indicate whether the statement is true or false
Proved reserves of petroleum are
a. the verified quantity of petroleum that can be recovered at current prices and levels of technology. b. the only reserves likely to be available in the future. c. refined products awaiting shipment to the market. d. the total amount of the resource in existence, regardless of the productive effort undertaken to expand the future availability of the resource.
In a country that has a population of 4 million people, the participation rate is 70% and the unemployment rate is 12%. The number of persons unemployed is:
(a) 2.8 million. (b) 1.8 million. (c) 236,000. (d) 336,000.