Which of the following is true of a duopoly with differentiated products?
A) A firm loses all its customers when its rival lowers the price of its product.
B) A firm does not lose all its customers when its rival lowers the price of its product.
C) A firm faces a perfectly elastic demand curve.
D) A firm faces a perfectly inelastic demand curve.
B
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Anti-competitive policies are often enforced by government because the public seems to think price cutting by large sellers
A) creates monopolies by reducing competition. B) increases competition among sellers. C) raises prices at the wholesale but not at the retail level. D) reduces the elasticity of margins.
An increase in the real interest rate will
A) most likely lower the reward to savings. B) most likely lower the cost of borrowing. C) most likely lower consumers' purchases of durable goods. D) cause consumers to spend more and save less.