Answer the following statement(s) true (T) or false (F)
1. Social welfare would be increased if a monopolistically competitive industry were replaced with a competitive industry.
2. The Robinson-Patman Act was designed to stop resale price maintenance.
3. It is possible for a firm engaging in predatory pricing to make a profit on the good even thought the price is set artificially low.
4. It is possible to avoid the prisoners' dilemma as long as the interaction is repeated and has a definite ending date.
5. Fair trade refers to the fact that retailers are free to set their price in the absence of resale price maintenance.
1. False
2. False
3. False
4. False
5. False
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Everything else held constant, in the market for reserves, when the federal funds rate is 3%, increasing the interest rate paid on excess reserves from 1% to 2%
A) lowers the federal funds rate. B) raises the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
Frequently, in the short run, the quantity supplied of a good is
a. impossible, or nearly impossible, to measure. b. not very responsive to price changes. c. determined by the quantity demanded of the good. d. determined by psychological forces and other non-economic forces.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
Goods that are subject to excludability provide examples of private goods.
Answer the following statement true (T) or false (F)