If firms in a duopoly with homogeneous products compete on price, a Nash equilibrium is reached when each firm charges a price ________
A) equal to its average cost
B) higher than its average cost
C) equal to its marginal cost
D) lower than its marginal cost
C
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Management of expectations by a central bank is based on the view that ________
A) decreasing the federal funds rate will lead to a reduction in the discount rate B) if economic agents believe that the price of an individual asset will rise in the future, they will buy that asset today, contributing to its eventual price increase C) if households expect an increase in prices in the future, they will engage in spending today D) households will increase their spending today if they believe that the monetary authorities are committed to maintaining low interest rates
Which of the following would likely cause an increase in the supply of single-serve coffee makers?
A) a decrease in the number of consumers demanding single-serve coffee makers B) an increase in the price of single-serve coffee makers C) a decrease in the cost of manufacturing single-serve coffee makers D) a widespread expectation that the price of single-serve coffee makers will rise in the future