Predatory pricing:
a. occurs when a firm increases price in order to exploit inelastic demand by consumers
b. occurs when a firm prices below average variable cost in order to drive competitors out of the market.
c. is difficult to distinguish from vigorous competition in practice.
d. is characterized by both (b) and (c).
d
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In 1961, real GDP totaled $575 billion and in 2011 it totaled $1,255 billion. Between 1961 and 2011, the population increased from 50 million to 100 million. Between 1961 and 2011, the standard of living based on real GDP per person
A) decreased from $125,500 to $28,750. B) increased by about 118 percent. C) increased from $11,500 to $12,550. D) decreased by 9 percent. E) increased by over 300 percent.
An industry is made up of 8 firms with the following percent market shares: 29, 20, 11, 10, 9, 8, 7, 6. What is the Herfindahl-Hirschman index in this industry?
A) 70 B) 100 C) 1462 D) 1692