Assume a firm lowers price below marginal cost to deter entry

A) This strategy is not credible.
B) This strategy is credible.
C) This strategy is illegal.
D) This strategy is immoral.


A

Economics

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XYZ Co operates in a competitive market. Its production function is q = L?K?. The exponents, ? and ?, are both less than 1. The firm's capital is fixed, and it takes the wage and price as given

Derive the firm's short-run demand for labor as a function of K, w, and p. How does the firm react to an increase in the wage rate?

Economics

Less of an economy's resources will be channeled into building new factories and equipment when: a. interest rates are high

b. households decide to save more of their income. c. firms are optimistic about their future profits. d. aggregate income increases. e. an economy has a trade deficit.

Economics

If GDP is more than GNP, we know with certainty that

A) a budget deficit exists. B) a trade surplus exists. C) a trade deficit exists. D) none of the above

Economics

Refer to the information provided in Figure 3.12 below to answer the question(s) that follow. Figure 3.12Refer to Figure 3.12. The supply curve for hula hoops shifts from S0 to S1. This could be caused by

A. a decrease in the number of firms selling hula hoops. B. a decrease in the demand for hula hoops. C. a decrease in the price of hula hoops. D. either B or C.

Economics