The fixed cost curve:
A. is a constant, vertical line.
B. is steep when output levels are low, then flattens as output increases.
C. is flatter when output levels are low, then gets steeper as output increases.
D. is a constant, flat line.
Answer: D
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What will be an ideal response?
Suppose two firms are in a game situation, and they each must decide on a strategy regarding whether to select a high price or a low price Profits for a firm are highest when it selects a low price, while the other selects a high price; profits are lowest if one selects a high price, while the other selects a low price; profits are in between when both select low prices; and profits are slightly higher when both select high prices. In the absence of collusion we expect
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