Economists use game theory to analyze oligopolies because
A) real markets are too complicated to analyze without using games.
B) it is more enjoyable for economists and students to learn by playing games.
C) game theory helps us to understand why interactions among firms are crucial in determining profitable business strategies.
D) game theory is useful in understanding the actions of firms that are price takers.
Answer: C
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When the price of a good increases by 300%, the quantity supplied of the good increases from 200 units to 900 units. The price elasticity of supply of the good is:
A) 1.17. B) 1.5. C) 3. D) 4.5.
Which of the following statements regarding perfect price discrimination is FALSE?
A) Only part of consumer surplus is captured by the firm as producer surplus. B) For the firm, the market demand curve becomes the firm's marginal revenue curve. C) The monopoly produces the output at which the marginal revenue equals the marginal cost. D) No deadweight loss is created.
In Figure 4.4, supply elasticity is zero in graph:
A. A. B. B. C. C. D. D.
Which of the following are substitute goods?
A) margarine and butter B) peanut butter and jelly C) pizza and soda D) trucks and gasoline