Refer to the information provided in Table 14.1 below to answer the question that follows.
Table 14.1B's Strategy
?Raise PriceDon't Raise Price?RaiseA's profit $3,000A's profit $10,000?PriceB's profit $3,000B's profit $15,000A's Strategy????Don'tA's profit $15,000A's profit $5,000?RaiseB's profit $10,000B's profit $5,000Refer to Table 14.1. The Nash equilibrium in the game is
A. (Raise Price, Don't Raise Price).
B. (Don't Raise Price, Raise Price).
C. (Don't Raise Price, Don't Raise Price).
D. Both A and B are correct.
Answer: D
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A change in tax rates
A) has a larger multiplier effect the smaller the tax rate. B) has a less complicated effect on GDP than does a tax cut of a fixed amount. C) will not affect disposable income. D) will not affect the size of the multiplier.
The economic burden of an excise tax
A. can usually be partially shifted from buyers onto sellers. B. equals the revenue from the tax. C. is less than the burden of an income tax that would raise the same revenue. D. is shared equally by buyers and sellers.
For a profit-maximizing monopolist
A. P = MC. B. P = ATC. C. P = MR. D. P > MC.
"Only in a progressive tax system does the amount of taxes increase as income increases." Do you agree or disagree? Explain
What will be an ideal response?