In a competitive industry some firms earn positive economic profits while some earn zero economic profit in the long run because:
A) there exists free entry and exit of firms.
B) the firms have different cost structures.
C) the firms sell their output at different prices.
D) the industry supply curve is perfectly elastic.
B
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According to the information presented in the text the parcel and express delivery industry could best be characterized as:
A) a perfectly competitive market. B) a monopolistically competitive market. C) an oligopoly. D) a monopoly.
A restaurant offers an "all you can eat" meal for $9 . Tyrone has eaten three servings and is trying to decide whether or not to go back for a fourth. The economic way of thinking suggests that Tyrone should go back for the fourth serving if and only if
a. his marginal benefit of the additional serving is greater than zero. b. his marginal benefit of the additional serving is at least $3. c. his marginal benefit of the additional serving is $9 or more. d. his total value from the meal exceeds $9.
This prisoner's dilemma game shows the payoffs associated with two firms, A and B, in an oligopoly and their choices to either collude with one another or not.
Given the payoffs in the matrix shown, Firm A:
A. does not have a dominant strategy. B. has a dominant strategy to compete. C. has a dominant strategy to collude. D. None of these statements is true.
If the demand elasticity for corn in the current marketing is -0.5 and you know that the demand curve is linear and it goes through 10 billion bushels at a price of $5.00 per bushel, then if production turns out to be 12 billion bushels, the price of corn will be
A. $3.00 B. $4.00 C. $5.00 D. $6.00