If an incumbent threatens to retaliate against entry, but its profits are greater under accommodated entry than under the proposed threat, potential entrants will ignore the threat
What will be an ideal response?
True. The threat is not credible since the incumbent firm is better off accommodating entry than retaliating.
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What gives money value under a fiat system?
A) Fiat money is also a commodity. B) The supply of fiat money is controlled by the government. C) Fiat money is backed by gold. D) Fiat money is the same as Treasury bonds.
Which of the following statements about the consumers' responses to rising gasoline prices is correct?
a. About 10 percent of the long-run reduction in quantity demanded arises because people drive less and about 90 percent arises because they switch to more fuel-efficient cars. b. About 90 percent of the long-run reduction in quantity demanded arises because people drive less and about 10 percent arises because they switch to more fuel-efficient cars. c. About half of the long-run reduction in quantity demanded arises because people drive less and about half arises because they switch to more fuel-efficient cars. d. Because gasoline is a necessity, consumers do not decrease their quantity demanded in either the short run or the long run.
The difference between asymmetric and symmetric shocks is that:
A) the former results in no conflicts in policy goals between countries. B) the latter results in policy conflicts between countries. C) the latter results in identical policies being implemented. D) the former is favored over the latter.
Which of the following is an example of an expectation of inflation?
A. Producers expect their prices on average to be higher next year. B. Producers expect the prices they pay for raw materials to be higher next year. C. Workers expect that the prices they pay for goods and services will be higher next year. D. All of these are correct.