The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement.
For Bagel World, ________ is a ________.
A. cheating on the agreement; dominated strategy
B. abiding by the agreement; dominant strategy when Bagels'R'Us also abides
C. cheating on the agreement; dominant strategy
D. abiding by the agreement; dominant strategy
Answer: C
Economics
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A negative income elasticity of demand coefficient indicates that:
A. The product is an inferior good B. The product follows the law of demand C. The product is a complementary good D. The product is a substitute good
Economics
If a firm that has total revenue of $5 million shuts down, we may conclude that its variable costs are __________.
Fill in the blank(s) with the appropriate word(s).
Economics