In which of the following scenarios would a predatory pricing scheme have the greatest chance of success, all else constant?
A) The predatory price is set well below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped only over a relatively long period of time.
B) The predatory price is set well below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a relatively long period of time.
C) The predatory price is set just below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped in a moderate period of time.
D) The predatory price is set just below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a very short period of time.
D
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Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a concert ticket. If the price of one of the tickets is $36
A) Violet and Walter receive a total of $52 of consumer surplus from buying one ticket each. No one else will buy a ticket. B) Xavier, Yolanda, and Zachary will receive a total of $68 of consumer surplus since they will buy no tickets. C) Violet and Walter will each buy two tickets. D) Walter will receive $4 of consumer surplus from buying one ticket.
Assume the required reserve ratio is 20 percent and the FOMC orders an open-market purchase of $100 million in government securities from member banks. If the oversimplified money multiplier is assumed, then the money supply will
A. increase by $500 million. B. increase by $100 million. C. decrease by $100 million. D. decrease by $500 million.