If firms have different costs and market demand only supports the quantity the incumbent produces, then the incumbent's threat to use limit pricing

The country of Kemper is on its aggregate production function at point W in the above figure. If the population increases with no change in capital or technology, the economy will

A) move to point such as Y. B) remain at point W. C) move to point such as X. D) move to point such as Z.

Next year's expected price of oil is $88 per barrel and the interest rate is 10 percent per year. According to the Hotelling Principle the price of oil this year is

A) $80 per barrel. B) $88 per barrel. C) $96 per barrel. D) None of the above answer is correct.