Before Walmart's entry into the retail pharmacy business which drove down prices, existing pharmacies
a. were operating efficiently, so this is an example of predatory pricing.
b. were colluding on price, so this is an example of a contestable market.
c. were not operating as efficiently as afterwards, so this is not a case of predatory pricing.
d. did not advertise but were forced to do so by the new competition.
c. were not operating as efficiently as afterwards, so this is not a case of predatory pricing.
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Suppose the economy is operating below its full employment level. The Fed
A) can move the economy toward the full employment level by expanding the money supply to increase aggregate supply. B) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand through both its direct and its indirect effects. C) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand and to hold prices constant. D) is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.
The marginal physical productivity of labor is defined as:
a. a firm's total output divided by total labor input. b. the extra output produced by employing one more unit of labor while allowing other inputs to vary. c. the extra output produced by employing one more unit of labor while holding other inputs constant. d. the extra output produced by employing one more unit of capital while holding labor input constant.