According to the kinked demand theory, when one firm raises its price, other firms will:
a. also raise their prices.
b. refuse to follow.
c. increase their advertising expenditures.
d. exit the industry.
b
Economics
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The classical model fails to recognize that
a. labor markets always clear b. managers develop paternalistic feelings toward their workers c. labor markets do not always clear d. what was true yesterday might not be true today e. search costs are low during recessions
Economics
Use the following formula to answer the indicated question: Welfare benefit = Maximum benefit - Wages A welfare system based on the welfare formula given
A. Will increase the risk of moral hazard. B. Will increase the number of people eligible for welfare. C. Has an effective marginal tax rate of 50 percent for welfare recipients. D. Will increase work incentives.
Economics