What will happen when a firm raises the price of a differentiated product in an imperfectly competitive market?
a. It will see lower sales but will not lose all its sales.
b. It will lose all its sales to competitor firms.
c. It will actually get new customers from other firms.
d. It will see an increase in revenues.
Ans: a. It will see lower sales but will not lose all its sales.
Economics
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If reserves in the banking system increase by $100, then checkable deposits will increase by $500 in the simple model of deposit creation when the required reserve ratio is
A) 0.01. B) 0.10. C) 0.05. D) 0.20
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The intuition behind the budget constraint is that
A) more options are preferred to less. B) money is the root of all happiness. C) information is power. D) scarcity is avoidable with prosperity.
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