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Author Question: With asymmetric information among consumers and positive search costs c, all the other firms in the ... (Read 81 times)

cdr_15

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on: Jul 1, 2018
With asymmetric information among consumers and positive search costs c, all the other firms in the market are charging a monopoly price Pm. A firm may lower its price
 
  A) by less than c to attract more buyers when there are many firms in the market.
  B) by more than c to attract more buyers when there are many firms in the market.
  C) by less than c to attract more buyers when there are few firms in the market.
  D) by more than c to attract more buyers when there are few firms in the market.

Question 2

What are the major ways that the risks of exchange rate changes can be hedged against?
 
  What will be an ideal response?


verrinzo

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Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

Offsetting transactions in the same currency; buying or selling currency in the forward or futures markets; call or put options; and currency swaps.


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