New classical economists say that an unanticipated decrease in aggregate demand first:
A. decreases the price level and real output, and then decreases long-run aggregate supply.
B. decreases long-run aggregate supply, and then decreases the price level and real output.
C. reduces short-run aggregate supply, and then reduces long-run aggregate supply.
D. decreases the price level and real output, and then increases short-run aggregate supply
such that the economy returns to the full-employment level of output.
D. decreases the price level and real output, and then increases short-run aggregate supply
such that the economy returns to the full-employment level of output.
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Collusion occurs when firms ________
A) charge a price equal to their marginal cost of production B) conspire to set the quantity they produce or the prices they charge C) compete with each other by setting a price slightly lower than the rival's price D) compete with each other by differentiating their products
If duopolists individually pursue their own self-interest when deciding how much to produce, the profit-maximizing price they will charge for their product will be
a. less than the monopoly price. b. equal to the perfectly competitive market price. c. greater than the monopoly price. d. possibly less than or greater than the monopoly price.