A risk-preferring person is willing to pay
A) a risk premium.
B) a fee to make a fair bet.
C) to obtain decreasing marginal utility.
D) None of the above.
B
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Refer to Scenario 18.1. What should the fishermen do if they know the factory will maximize profits and no negotiation is possible?
A) Install a treatment plant. B) Do not install a treatment plant. C) It makes no difference if the fishermen do or do not install a treatment plant. D) Install a filter. E) Exit the industry.
Regarding price leadership, which of the following is NOT true?
a. one firm may establish itself as the dominant firm b. the dominant firm is frequently a larger size or has lower cost structure c. Price leadership is a model of price-output determination d. Once established, a barometric price leader will not change e. price leadership is a pricing strategy followed in many oligopolistic industries