What market structures other than oligopoly have the characteristic of one firm's actions affecting the actions of its competitors? Explain your answer
What will be an ideal response?
No other market structure has the characteristic that one firm's actions can affect the actions of its competitors. In monopoly, there are no competitors to affect. And in perfect competition and monopolistic competition, there are so many competitors that any one firm's actions have no measurable impact on its competitors. Oligopoly is unique in that it is the only market structure in which one firm's actions affect the actions of its competitors.
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The additional benefit of increasing some activity by one-unit is called the
A) scarcity. B) total benefit. C) opportunity cost. D) marginal benefit. E) unit cost/benefit.
If an agent is risk neutral and a principal is risk averse, which of the following contracts would be efficient in risk bearing?
A) A fixed fee is paid to the agent. B) A fixed fee is paid to the principal. C) An hourly rate is paid to the agent. D) The agent enjoys a share of the profit.