For the economy as a whole, about what percentage of total firm revenue is spent on advertising?
2%
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There are two firms in an industry and their products are perfect substitutes for each other. Each firm had a market share of 50% and charged equal prices
However, when the demand for the good declined due to a recession, Firm A lowered its price to increase sales. Firm B responded by lowering its price further. This is an example of the ________ of oligopoly. A) Bertrand model B) Cournot model C) Ricardian model D) Keynesian model
If the wealth effect of an increase in the real wage was greater than the substitution effect of an increase in the real wage
a. the labor supply curve would slope upward. b. the labor supply curve would slope downward. c. the labor supply curve would be vertical. d. the labor demand curve would solely determine the real wage.
Two identical firms that share a market and produce a homogeneous good will find the Bertrand Oligopoly LEAST attractive because
A) Cartels generate the highest joint profit. B) a Cournot Oligopoly will generate more profit than a Bertrand Oligopoly. C) they want to avoid a price war that leads to profit erosion and P = MC. D) All of the above.
Constant returns to scale occur when: a. long-run average total cost decreases with an increase in output
b. long-run average total cost increases with an increase in output. c. long-run average total cost remains constant with an increase in output. d. long-run average variable cost decreases with an increase in output.