In competing with rivals, monopolistic firms will tend to use:
A. Price cuts because they do not add to costs like advertising
B. Advertising because it is less easily duplicated than price cuts
C. Collusion because it is a legal way to increase market share
D. Price wars because they will increase the profits of firms
B. Advertising because it is less easily duplicated than price cuts
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The local lemon market has the following supply and demand relationships:
QD = 100 - 5p - po + 2I QS = 4p where p is the price of lemons (per pound), Q is the quantity of lemons in pounds, I is the average consumer income, and po is the price per pound of oranges. Derive the equilibrium price and quantity of lemons as functions of the price of oranges and average consumer income. Use the calculus method of comparative statics to compute the effects of income and the price of oranges on the equilibrium price and quantity of lemons.
Adam Smith's book, The Wealth of Nations, was published at the time of the:
a. War of 1812 b. U.S. Declaration of Independence. c. U.S. Civil War. d. Great Depression.