If an incumbent cannot commit and faces an identical potential entrant with relatively high fixed costs that are below the level where entry is blockaded, the incumbent will
A) produce the Cournot duopolist level of output.
B) produce the Stackelberg leader level of output.
C) set price equal to marginal cost.
D) produce a level of output that is greater than the Stackelberg leader level of output.
D
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Which of the following is an important ingredient of efficient economic organization?
a. high marginal tax rates b. competitive markets c. rapid increases in the money supply d. imposition of high tariffs that will protect domestic producers from the ravages of foreign competition
The figure below shows the international market for moped. DM is a country's demand for imports curve and SX is the foreign export supply curve. The importing country now imposes an import quota of 0.9 million, with the licenses given for free to the existing import distributors.
As a result of the quota being imposed on moped imports by this country, the world as a whole will
A. lose $7 million. B. gain $10 million. C. gain $31.5 million. D. lose $17 million.