Predatory dumping occurs when
A) foreign firms sell below cost with the intent to drive firms out of the domestic market.
B) foreign firms sell below cost because the product is perishable.
C) foreign firms sell at a price that is below the price of domestic firms.
D) foreign firms sell at a price that covers the cost of their variable inputs.
A
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When one player has to make a decision before the other player, the situation is called a:
A. commitment game. B. simultaneous game. C. sequential game. D. prisoner's dilemma.
If P = Q/15 represents marginal cost for a monopolist and market supply for a competitive industry and market demand is given by Qd = 500 - 10P, the difference between the monopoly equilibrium and the competitive equilibrium is that a monopolist would produce:
A. 187.5 units of output at a price of $31.25, whereas competitive output would be 250 units at a price of $25. B. 250 units of output at a price of $25, whereas competitive output would be 300 units at a price of $20. C. 187.5 units of output at a price of $31.25 each, whereas competitive output would be 300 units at a price of $20. D. 300 units of output at a price of $20, whereas competitive output would be 187.5 units at a price of $31.25.
Prices below the free market equilibrium price are inefficient because the willingness to pay by someone to consume an additional unit ________ the marginal cost to someone for producing that unit.
A. exceeds B. is less than C. equals D. None of these; efficiency is defined in terms of natural resources, not market equilibrium.
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow.
Figure 6.1Refer to Figure 6.1. AC represents Tom's budget constraint. Point D then represents a point that is
A. not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income. B. an available option, as Tom is just spending all of his income. C. available, but at which he does not spend all his income. D. in his opportunity set but not on his budget constraint.