The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. If the fixed cost of entry were to increase, which of the following would occur?
A) The incumbent chooses the Cournot level of output.
B) The incumbent shuts down.
C) The entry-deterring level of output rises.
D) The entry-deterring level of output falls.
D
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As a measure of competition in an industry, concentration ratios have several flaws. One of these flaws is that concentration ratios
A) are calculated for the national market, even though competition in some industries is mainly local. B) assume that all industries have low barriers to entry. C) assume that a ratio less than 40 percent means an industry is perfectly competitive. D) assume there are only four firms in an industry.
The Keynesian aggregate demand curve slopes downward because for any given money supply, an increase in the price level ______ real money holdings which _____ the interest rate and _____ income
a. increases; lowers; increases b. reduces; raises; reduces c. reduces; lowers; increases d. increases; raises; reduces
The amount of money borrowed in a transaction is called:
A. interest. B. principal. C. internal rate of return. D. present discounted value.
All of the following are variables that can be manipulated to affect fiscal policy, except one. Which is the exception?
What will be an ideal response?