Which of the following is an advantage of clustering?
a. New entrants can charge higher prices for products as compared to existing firms
b. New entrants can have lower cost of gathering regional information about trends in the market.
c. New entrants can benefit from favorable terms of trade.
d. New entrants can engage in non-price competition with other firms in the industry.
e. New entrants can charge low prices for their products.
b
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What is one reason it might be difficult to dissuade people from pirating music off the Internet?
A) Consumer surplus is very high when music is pirated. B) In general, consumers get a rush from "stealing." C) Consumers mistakenly believe that the Internet is public domain. D) Producer surplus is very low when music is pirated.
In general, the smaller the price elasticity:
a. the smaller the responsiveness of price to changes in quantity. b. the smaller the responsiveness of quantity to changes in price. c. the larger the responsiveness of price to changes in quantity. d. the larger the responsiveness of quantity to changes in price.