The assumption that rival firms will match a firm’s price decreases but not its price increases is a basic feature of: A) model of limit pricing. B) the kinked demand curve model. C) the predatory pricing model. D) cartel theory. ANSWER B
Date: September 10th, 2020
Which of the following is not considered to be a determinant of the price elasticity of demand for a particular good? A) The number of available substitutes. B) The cost of the good relative to total income. C) The quantity of the good that is supplied to the market. D) The time period under consideration. […]
Date: September 10th, 2020
An increase in price will result in an increase in total revenue if demand is: A) perfectly elastic. B) relatively elastic. C) inelastic. D) unit elastic. ANSWER C
Date: September 10th, 2020
A common theme in the discussions of the airline, soft drink, doughnut, and express delivery industries is that oligopolistic firms tend to compete: A) strictly on the basis of price and nothing else. B) strictly on the basis of cost minimization. C) primarily on the basis of product differentiation and price. D) primarily by erecting […]
Date: September 10th, 2020
An increase in price will result in no change in total revenue if: A) the percentage change in price is large enough to cause quantity demanded to fall to zero. B) the coefficient of elasticity is equal to zero. C) the percentage change in quantity demanded is equal to the percentage change in price (in […]
Date: September 10th, 2020
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. ANSWER C
Date: September 10th, 2020
Gross Domestic Product (GDP) is defined as the market value of: A) all goods and services sold during the year by domestic and foreign producers. B) all final consumer goods produced during the year by domestic and foreign suppliers. C) all intermediate goods produced during the year by domestic and foreign suppliers. D) all final […]
Date: September 10th, 2020
If a country’s central bank wants to stimulate spending in the economy, it should: A) increase the amount of assets banks should keep on reserve at all times. B) decrease taxes. C) lower interest rates. D) increase government spending. ANSWER C
Date: September 10th, 2020
Assume the production of a particular good is characterized by significant economies of scale. In addition, three different versions of the good can be produced, and large segments of the population prefer different versions of the good. In this case, the preferred market structure for this good would be: A) perfect competition. B) monopoly. C) […]
Date: September 10th, 2020
In which of the following cases would the price elasticity of demand be expected to increase? A) The number of close substitutes for the good increases. B) The time period under consideration decreases. C) The cost of the good relative to total income decreases. D) The supply of the good increases. ANSWER A
Date: September 10th, 2020
