In exchange for a share of the revenues earned on campus, State U has granted CheapFizz the exclusive right to sell soft drinks in the student union and in vending machines on campus. Prior to the deal, three soft drink companies sold beverages on campus; now no other soft drink company is allowed to sell its products on campus. CheapFizz now has market power due to:
A. network economies in the consumption of soda.
B. its exclusive ownership of an input.
C. its exclusive license to sell soda.
D. economies of scale in the production of soda.
Answer: C
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A) less then; fall B) greater than; fall C) equal to; fall D) less than; rise E) greater than; rise
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A. interest rate will not change. B. interest rate will increase. C. interest rate will decrease. D. money supply is decreased.
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A. decrease the marginal product of labor. B. decrease the marginal product of capital, but have no effect on the marginal product of labor. C. increase the marginal product of labor. D. not affect the marginal product of labor.