In the short run
A. existing firms can exit an industry.
B. new firms can enter an industry.
C. existing firms do not face limits imposed by a fixed input.
D. all firms have costs that they must bear regardless of their output.
Answer: D
Economics
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With a 10% reserve requirement ratio, a $100 deposit into New Bank means that the maximum amount New Bank could lend is
A) $90. B) $100. C) $10. D) $110.
Economics
In deciding whether to invest in excess capacity in order to deter entry, incumbents should consider all of the following except
a. the order of play in pricing and capacity choice decisions b. the customer sorting pattern c. the sunk cost required to achieve excess capacity d. the joint-profit-maximizing cartel output e. the potential entrant's projected profitability
Economics