Under what conditions would firms be likely to support an industry-wide advertising ban?
What will be an ideal response?
If advertising only takes share away from rivals, the firms in the industry are better off if advertising is banned. Yet, if advertising is not banned, their dominant strategy is to advertise. This Nash equilibrium of all firms advertising, however, does not yield maximum joint profits.
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Capital deepening will occur as long as total saving is greater than depreciation
Indicate whether the statement is true or false
The long run is a time frame in which
A) the quantities of some factors of production are fixed and the quantities of other factors of production can be varied. B) the quantities of all factors of production can be varied. C) the quantities of all factors of production are fixed. D) all costs are sunk costs.