When a firm faces a perfectly competitive market and buys its inputs from perfectly competitive markets, the only choice the firm has to affect its profits is to:
A. increase its selling price.
B. change the quantity it produces.
C. decrease the selling price.
D. decrease its cost of production lower than other firms.
B. change the quantity it produces.
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If an incumbent cannot commit and faces an identical potential entrant with relatively high fixed costs that are below the level where entry is blockaded, the incumbent will
A) produce the Cournot duopolist level of output. B) produce the Stackelberg leader level of output. C) set price equal to marginal cost. D) produce a level of output that is greater than the Stackelberg leader level of output.
An increase in nominal GDP
A) is absolute real economic growth. B) is per capita real economic growth. C) is both per capita and absolute real economic growth. D) does not necessarily mean either absolute or per capita real economic growth.