The efficient market hypothesis states that:
A. markets currently contain an efficient amount of information for them to clear.
B. markets currently contain all available information and correctly value instruments.
C. when buyers and sellers act in their own best interest markets will be efficient.
D. in order for markets to be efficient they need to be adequately regulated.
Answer: B
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Suppose the demand for saline solution is perfectly inelastic for contact lens wearers
If the government imposes a tax on saline solution, what occurs? Be sure to tell what happens to the price paid by the buyers and discuss the incidence of the tax.
The practice of firms temporarily reducing prices in order to eliminate competition is called:
A. competitive pricing. B. predatory pricing. C. discount pricing. D. strategic pricing.