Refer to Figure 14-5. Does it make sense for Netflix to lower its price in order to deter Spotify's entry into the streaming video market?
A) yes, because it is always profitable to remain a monopoly
B) yes, because Netflix stands to make a profit of $7 million by lowering its price and keeping Spotify out of the market
C) no, because Spotify will enter the market regardless of Netflix's decision about its subscription price
D) no, because Netflix will make a higher profit by keeping its subscription price unchanged, whether Spotify enters the market or not
D
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Prices under an ideal cartel situation will be equal to
A) monopoly prices. B) competitive prices. C) prices under monopolistic competition. D) marginal cost.
An investment project has an expected profit rate of 12 percent. The going rate of interest is 12 percent. Firm X would need to borrow money to carry out this project; firm Y would use its own funds. Which statement is true?
A. Firm X would undertake the project; Firm Y would not. B. Neither firm would undertake this project. C. Both firms would undertake this project. D. Firm Y would undertake the project; Firm X would not.
The indifference curves for left gloves and right gloves are straight lines
a. True b. False Indicate whether the statement is true or false
Because every transaction has a buyer and a seller,
a. GDP is more closely associated with an economy's income than it is with an economy's expenditure. b. every transaction contributes equally to an economy's income and to its expenditure. c. the number of firms must be equal to the number of households in a simple circular-flow diagram. d. firms' profits are necessarily zero in a simple circular-flow diagram.