For much of its history, General Motors was characterized by having versions of the same car with different nameplates, e.g., Chevrolet vs. Cadillac. This business model has seemed less successful in recent years. What might explain this?
A) Consumers have more information concerning costs and quality.
B) Consumers have more information concerning costs but not quality.
C) Sellers have more information concerning costs but consumers have more information about quality.
D) Consumers have less information concerning costs and quality.
A
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Suppose that Thierry and Abdul are duopolists. Thierry is producing 700 units of output, and Abdul is producing 500 units of output. When Abdul produces 500 units, Thierry maximizes profit by producing 700 units. When Thierry produces 700 units of output, Abdul maximizes profit by producing 500 units. Thierry and Abdul are
a. pricing at the minimum of marginal cost. b. in a competitive market. c. at a Nash equilibrium. d. engaging in mark-up pricing.
Rent seeking involves
A. finding reasonable rent rates. B. price floors. C. price ceilings. D. citizen groups lobbying elected officials to manipulate government policy.