When producers are hopeful about the economic business outlook, they often
A. decrease their inventory levels.
B. decrease their purchase of new goods.
C. increase their investment in capital goods.
D. increase their investment in savings.
C. increase their investment in capital goods.
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In order for a price ceiling to have an effect on the market, must it be set above or below the equilibrium price? Why?
What will be an ideal response?
Suppose there are 100 firms in an industry. If the leading firm has a 60 percent market share, the second largest firm has a market share of half the leader's, the third has a market share of half the second's, and the fourth largest has a market share of half the third's, what is the four-firm concentration ratio?
a. 75 percent b. 85 percent c. 95 percent d. 100 percent e. impossible because their combined market shares exceed 100 percent