In game theory, we usually assume that all players
A) act rationally.
B) use the information available to them to decide on a best strategy.
C) know about the payoffs of the other players.
D) All of the above.
D
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The above figure shows the apartment rental market in Bigtown. If the market is in equilibrium and then the Bigtown Housing Authority imposes a rent ceiling of $500 per apartment, which of the following would occur?
A) a decrease in the search time and expense of finding an apartment B) an increase in the search time and expense of finding an apartment C) an increase in producer surplus but a decrease in consumer surplus D) an increase in efficiency
When firms are neither entering nor exiting a perfectly competitive market,
a. total revenue must equal total cost for each firm. b. economic profits must be zero. c. price must equal the minimum of marginal cost for each firm. d. Both a and b are correct.