Because firms selling a homogeneous product set price in response to the (perceived) pricing decision of other firms in the Bertrand Model of oligopoly in equilibrium price exceeds marginal cost
Indicate whether the statement is true or false
False. Because firms set price and sell a homogeneous product other firms will always set price lower if a firm prices above marginal cost. In equilibrium all firms charge P=MC (same as the competitive equilibrium)
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Disposable personal income equals personal income
A) minus personal tax payments plus government transfer payments. B) plus government transfer payments. C) minus personal tax payments. D) minus government transfer payments plus personal tax payments.
In the aggregate demand-aggregate supply model, if entrepreneurs become convinced that future profitability of capital has increased,
A) current output will fall, but the price level will rise. B) current output will rise, but the price level will fall. C) current output and the price level will both rise. D) current output and the price level will both fall.
An example of an investment is
A. the purchase of a share of Berkshire Hathaway stock. B. the purchase of an iPhone by a company for one of its salesmen. C. the purchase of a government Treasury bill. D. all of the above
Explain the rationale for the shape of the short-run aggregate supply curve in the immediate short run.
What will be an ideal response?