One firm previously operated as a monopoly. Now, one potential entrant exists. Consumers would prefer
A) entry, and the firms to split the output equally.
B) no entry, and for the incumbent to produce the Stackelberg leader level of output.
C) entry, and for the incumbent to produce the Stackelberg leader level of output.
D) no entry, and the monopoly to continue.
C
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The market prices of existing bonds are
A) inversely related to the interest rate. B) stated in terms of the interest rate. C) not related to the interest rate. D) directly related to the interest rate.
Decisions by depositors to increase their holdings of ________, or of banks to hold ________ will result in a smaller expansion of deposits than the simple model predicts
A) deposits; required reserves B) deposits; excess reserves C) currency; required reserves D) currency; excess reserves