When diminishing marginal returns set in,
A) average product is increasing.
B) average variable cost is decreasing.
C) average cost is decreasing.
D) None of above.
D
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Refer to Figure 14-1. Should Lexus lower its price in order to deter BMW's entry into the luxury hybrid automobile market?
A) Yes, it will drive BMW out of the market. B) No, it should keep the same price and work to capitalize on its brand loyalty. C) In terms of profit earned, it makes no difference whether Lexus lowers its price or not; in either case it will make $280 million profit if BMW enters. D) No, because BMW will enter the market regardless of Lexus' decision about its price.
When large oligopolistic firms negotiate with the unions of their employees, the resulting bargaining process closely resembles
A. perfect competition. B. a dual labor market. C. monopolistic competition. D. bilateral monopoly.