What is game theory?
What will be an ideal response?
Game theory analyzes oligopolistic behavior as a complex series of strategic moves and reactive countermoves among rival firms. In game theory, firms are assumed to anticipate rival reactions.
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The substitution effect of a price change refers to
A) the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes. B) the shift in the demand curve due to a change in purchasing power brought about by the price change. C) the movement along the demand curve due to a change in purchasing power brought about by the price change. D) the shift of a demand curve when the price of a substitute good changes.
A union can influence the equilibrium wage rate by:
a. All of the answers are correct. b. lobbying for legislation to reduce immigration. c. collective bargaining. d. featherbedding.