The federal minimum wage law demonstrates
a. market equilibrium.
b. a societal choice for economic equity over efficiency.
c. the function of equilibrium price in a competitive market.
d. government intervention to ensure the equilibrium price.
Ans: b. a societal choice for economic equity over efficiency.
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An oligopoly is a market situation in which
A) there are many firms producing differentiated products. B) there is a single firm producing several varieties of a product. C) all the sellers act independently of the others. D) there are very few sellers and they recognize their strategic dependence on one another.
If monopolistic firms facing similar cost and demand conditions successfully collude, price and output results in this industry will be most accurately predicted by which of the following models?
A. The kinked demand curve model of oligopoly B. The price-leadership model of oligopoly C. The pure monopoly model D. The monopolistic competition model