What are the major sources of risk for the firm?
What will be an ideal response?
Economic uncertainty, competition (actions of competitors), changes in demand, changes in technology, changes in input costs
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The assumption that given the strategy chosen by the other participant, a player will always choose the strategy that brings him or her the best payoff is called
A) strategic interaction. B) economic self interest. C) the rationality assumption. D) the profit-maximizing assumption.
The short run is not the same length of time for all firms and industries because: a. entrepreneurs have different tastes and preferences
b. the average product of labor varies across industries. c. the life span of capital and the extent of capital specialization will vary across firms and industries. d. The marginal product of capital begins to diminish at different levels of capital utilization across firms.