The Big Tradeoff

Imagine a duopoly in which two firms, A and B, produce the monopoly profit-maximizing output and equally share the economic profit. If firm A increases output,

A) both firms' profits increase. B) firm A's profits increase and firm B's profits decrease. C) firm B's profits increase and firm A's profits decrease. D) both firms' profits decrease. E) firm A's profits increase and firm B's profits do not change.

The largest percentage of banks' holdings of securities consist of

A) Treasury and government agency securities. B) tax-exempt municipal securities. C) state and local government securities. D) corporate securities.