Suppose there are two firms maintaining a cartel agreement. If one firm suddenly drops its price, the other firm could interpret this as signaling:
A. a change in market conditions.
B. limit pricing.
C. cartel pricing.
D. cooperative pricing.
Answer: A
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An increase in the interest rate will increase the demand for loanable funds
a. True b. False Indicate whether the statement is true or false
In the short run, which of the following is the most likely effect of an anticipated move to a more expansionary monetary policy?
What will be an ideal response?
When interest rates are low, people often ______.
a. put a bit aside every payday to invest in U.S. Treasury bills b. invest in long-term savings instruments c. hang on to their money to make sure they have enough for everyday expenses d. put more money into their CDs
Define the following terms and explain their importance to the study of macroeconomics. a. velocity b. equation of exchange c. monetarism d. automatic stabilizer
What will be an ideal response?