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When a firm enters a new but ontestable market it sells at the monopoly price, so as to maximise profits . As new players enter the industry, it starts reduig the prie as dictated by the market price.
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In a contestable market with one firm, the existing firm A. sets its price above the...
Question 1: Question 2: In a contestable market with one firm, the existing firm A. sets...
Question 1:
Question 2:
In a contestable market with one firm, the existing firm A. sets its price above the monopoly price. B. sets its price equal to the monopoly price. c. has no competition. D. sets its price lower than the monopoly price. O E. sets its price so that other firms will enter the market. Timely strategies (red squares) High price Low price 10.5 1.5 Timely Busines is earning $15.0 million a year economic profit on a route...
A contestable market is similar to a perfectly competitive market in that there O A. are...
A contestable market is similar to a perfectly competitive market in that there O A. are barriers to entry. OB. are no barriers to entry. O c. is a perfectly elastic demand. OD. will be no entry if the existing firm makes an economic profit. O E. can be only one firm in the market. The Competition Act distinguishes between business practices that are criminal and noncriminal. Which of the following is noncriminal? O A. false advertising O B. refusal...
Bud (red squares) 20,000 litres 10,000 litres Bud and Wise are the only two producers of...
Bud (red squares) 20,000 litres 10,000 litres Bud and Wise are the only two producers of aniseed beer, a New Age product designed to displace root beer. They know that if they both limit production to 10,000 litres a day, they will make the maximum attainable joint profit of $200,000 a day—$100,000 a day each. They also know that if either of them produces 20,000 litres while the other produces 10,000 litres a day, the one that produces 20,000 litres...
Suppose a single firm produces all of the output in a contestable market. The market inverse...
Suppose a single firm produces all of the output in a contestable market. The market inverse demand function is P= 400-4Q, and the firm's cost function is G Price: $ | 1 Profits: $ 10Q. Determine the firm's equilibrium price and corresponding profits. You are the manager of a firm that competes against four other firms by bidding for government contracts. While you believe your product is better than the competition, the government purchasing agent views the products as identical...
In a market operated by a cartel, if price is $30 which of the following must...
In a market operated by a cartel, if price is $30 which of the following must be true? Marginal revenue is 30 and marginal cost must be less than $30. Marginal revenue must be zero ATC must be under $30 Marginal Revenue and marginal cost must be under $30 Which of the following is the best example of oligopoly? paper towels Ogreen beans auto repair Apples If a oligpolist is experiencing profits in the short-run, then in the long-run Firms...
3. If a firm must reduce price in order to sell a larger output: a. the...
3. If a firm must reduce price in order to sell a larger output: a. the firm has some monopoly or market power b. MR >P c. the demand curve facing the firm is perfectly inelastic d. the firm is a price taker e. the firm is a natural monopoly 9. Assuming that there are two firms in the market, which of the following statements is accurate concerning equilibrium market output in the Cournot and Bertrand models? a. equilibrium market...
1. A cartel is a group of firms that attempts to a. maximize joint revenue. b....
1. A cartel is a group of firms that attempts to a. maximize joint revenue. b. increase competition. c. behave independently. d. maximize joint profit. 2. If a firm's product loses brand loyalty, then the demand curve will: a. Become less price elastic. b. Shift to the right. c. Become more price elastic. d. Shift to the left. 3. Assume a monopoly confronts the same costs and demand as a competitive industry. In this case, the monopolist produces: a. Less...
Question 1 For a monopolist? Select one: a. all of the above are true. b. existing...
Question 1 For a monopolist? Select one: a. all of the above are true. b. existing economic profits can be sustained over time. c. its demand curve is downward sloping. d. its marginal revenue is less than price. Question 2. For a natural monopoly, which of the following is false? Select one: a. It is more efficient to have a single firm produce the good. b. One large firm can produce at lower cost than two or more smaller firms....
1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal...
1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal to marginal revenue. d. price is less than marginal revenue. e. average total cost equals marginal cost. Both competitive and monopolistically competitive firms a. can maximize profit by raising price. b. cannot control or set their own price c. can maximize profit by producing to...
How does contestable markets theory challenge orthodox market structure theory? a. Contestable markets theory emphasizes product...
How does contestable markets theory challenge orthodox market structure theory? a. Contestable markets theory emphasizes product differentiation; orthodox market structure theory does not. b. Contestable markets theory argues that firms do not maximize sales; orthodox market structure theory argues that they do. c. Orthodox market structure theory places much greater weight than contestable markets theory on the number of firms in an industry as a major factor in determining a firm's behavior. d. Contestable markets theory emphasizes nonprice competition; orthodox...
Question 1:
Question 2:
In a contestable market with one firm, the existing firm A. sets its price above the monopoly price. B. sets its price equal to the monopoly price. c. has no competition. D. sets its price lower than the monopoly price. O E. sets its price so that other firms will enter the market. Timely strategies (red squares) High price Low price 10.5 1.5 Timely Busines is earning $15.0 million a year economic profit on a route...
A contestable market is similar to a perfectly competitive market in that there O A. are barriers to entry. OB. are no barriers to entry. O c. is a perfectly elastic demand. OD. will be no entry if the existing firm makes an economic profit. O E. can be only one firm in the market. The Competition Act distinguishes between business practices that are criminal and noncriminal. Which of the following is noncriminal? O A. false advertising O B. refusal...
Bud (red squares) 20,000 litres 10,000 litres Bud and Wise are the only two producers of aniseed beer, a New Age product designed to displace root beer. They know that if they both limit production to 10,000 litres a day, they will make the maximum attainable joint profit of $200,000 a day—$100,000 a day each. They also know that if either of them produces 20,000 litres while the other produces 10,000 litres a day, the one that produces 20,000 litres...
Suppose a single firm produces all of the output in a contestable market. The market inverse demand function is P= 400-4Q, and the firm's cost function is G Price: $ | 1 Profits: $ 10Q. Determine the firm's equilibrium price and corresponding profits. You are the manager of a firm that competes against four other firms by bidding for government contracts. While you believe your product is better than the competition, the government purchasing agent views the products as identical...
In a market operated by a cartel, if price is $30 which of the following must be true? Marginal revenue is 30 and marginal cost must be less than $30. Marginal revenue must be zero ATC must be under $30 Marginal Revenue and marginal cost must be under $30 Which of the following is the best example of oligopoly? paper towels Ogreen beans auto repair Apples If a oligpolist is experiencing profits in the short-run, then in the long-run Firms...
1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal to marginal revenue. d. price is less than marginal revenue. e. average total cost equals marginal cost. Both competitive and monopolistically competitive firms a. can maximize profit by raising price. b. cannot control or set their own price c. can maximize profit by producing to...
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