If the price of a good is expected to fall in the future, its
A. demand curve will shift to the right.
B. supply curve will shift to the right.
C. demand curve will shift to the left.
D. b) and c).
Answer: D
Economics
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The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. Assuming a fixed cost of entry, the incumbent will deter entry because
A) it is more profitable than accommodating entry. B) it increases consumer surplus. C) the potential entrant winds up with zero profit. D) the incumbent would earn zero profit if it accommodated entry.
Economics
The substitution effect of a price change describes what happens to the shift in demand for a good when its price changes
a. True b. False
Economics