1. Suppose a firm that sells a variety of athletic shoes is trying to start a pa

Question

1.  Suppose a firm that sells a variety of athletic shoes is trying to start a pattern of price leadership in its market.  Which os the following is not a problem this firm migh have to face?

    7                  0                      10

    6                  4                      20

    5                  8                      32

    4                 12                      48

    3                 16                      66

From the table above, what is the maximum profit this monopolistic competitor can earn in the long run?

A. Rivals recognize  the intent of its actions. B. Other firms may not neccessarily folloe the leader. C. Other firms may not follow the leader but offer better service instead. D. The price leader must keep costs lower than other firms'

2. Price wars occur more often in monopolistic competition than in other market structures True
False 3. The historical trend in the video rental industry A. has been  one of increasing economic profits B. has been cyclical in the sense that profits decrease, then increase. C. reflects the trend toward market concentration in all oligopolies. D. has been one of increasing market concentration.

Explanation / Answer

false

true

Other firms may not neccessarily folloe the leader.

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