If your competitors will follow your price cuts and ignore price hikes, your firm
A. faces perfect competition.
B. faces a kinked demand curve.
C. is the marginal price leader of an oligopoly.
D. must be the most efficient firm in the industry.
B. faces a kinked demand curve.
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A bureaucrat at a public utility commission hearing testifies that the local area telephone monopoly is able to maximize its revenue. For that reason the rate-hike request should be denied
What will be an ideal response?
Assuming that a is positive, theories of short-run aggregate supply are expressed mathematically as
a. quantity of output supplied = natural rate of output + a(actual price level - expected price level). b. quantity of output supplied = natural rate of output + a(expected price level - actual price level). c. quantity of output supplied = a(actual price level -expected price level) - natural rate of output. d. quantity of output supplied = a(expected price level - actual price level) - natural rate of output.