Macroeconomics

In which of the following situations would reliance on expert opinion

In which of the following situations would reliance on expert opinion as a basis for a managerial decision be most preferred? A) When the product can be packaged with a variety of price and quality combinations. B) When the business in question serves as a supplier of inputs to other businesses, especially in multi-product situations […]

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Date: September 10th, 2020

Explain why X-inefficiency is likely to be more prevalent in an indust

Explain why X-inefficiency is likely to be more prevalent in an industry in which firms have market power. What will be an ideal response?   ANSWER The assumed goal of firms is to maximize profits, i.e., the difference between total revenues and total costs. X-inefficiency refers to the situation in which firms have fewer incentives […]

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Date: September 10th, 2020

Assume the costs of production in the U.S. auto industry are rising an

Assume the costs of production in the U.S. auto industry are rising and, at the same time, the prices of Japanese-made autos are decreasing. What would reasonably be expected to happen to the equilibrium price and quantity of U.S.-made autos? A) Price will increase; quantity cannot be determined. B) Price will decrease; quantity cannot be […]

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Date: September 10th, 2020