A. it assumes that firms believe that their rivals will not respond to any price change they initiate
B. it fails to explain how a firm arrived at its price and output decision initially
C. The model cannot be tested empirically.
D. Real-world pricing strategies are more simple than those assumed in this model
A. perfectly competitive firms
B. a cartel
C. a monopoly
D. monopolistically competitive firms.
A. entry to it and exit from it are both costless
B. entry to it and exit from it are both costly
C. entry to it costless, but exit from it is costless
D. entry to it is costly, but exit from it is costless
A. monopolistically competitive firms
B. a cartel
C. perfectly competitive firms
D. a monopoly.
A. the additional profit the firms earns when it sells an additional unit of output
B. the difference between total revenue and total cost
C. The ratio of total revenue to quantity.
D. the added revenue that a firm takes in when it increases output by one additional unit.
A. approximately one-half
B. smaller than
C. larger than
D. approximately equal to
A. The franchiser’s fee that a restaurant must pay to the national restaurant chain
B. The payroll taxes that are paid on employee wages.
C. The monthly rent on office space that it leased for a year
D. The interest payments made on loans.
A. a colluding industry
B. a merged industry
C. a concentrated industry
D. a natural monopoly
A. maximized its total revenue
B. set price equal to its average cost
C. equated marginal revenue and marginal cost
D. maximized the difference between marginal revenue and marginal cost.
B. TFC – q