Suppose Cournot duopolists firms (A and B) face the same market demand curve, and initially have identical costs. Firm A figures out a way of reducing its marginal cost. At the new Nash-Cournot equilibrium,
A) firm A's price falls.
B) firm A's output expands and firm B's output contracts.
C) firm B's profits expand.
D) the price charged by both firms increases.
B
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A country with high inflation, rising budget and trade deficits, and a rapidly expanding money supply
(a) is in transition. (b) has macroeconomic instability. (c) is practicing import substitution. (d) is practicing export promotion.
The Vuvuza Corporation currently has 10 million shares of stock outstanding, the stock is trading for $42 per share, and its stock of capital goods is valued at $70 million
Based on the Tobin's q value for the Vuvuza Corporation, we would expect Vuvuza to A) increase its capital stock. B) depreciate more of its assets. C) issue more shares of stock to be able to afford to finance investment expenditures. D) cut back on current production.