Author Question: Mutual interdependence occurs when A) all firms in an industry are affected by the same macro ... (Read 93 times)

LCritchfi · **on:** Jul 1, 2018

Mutual interdependence occurs when

A) all firms in an industry are affected by the same macro economic conditions, such as a recession, inflation, interest rates, exchange rates, etc.
B) the actions of firms are independent of each other.
C) the actions of one firm in an industry are easily recognized and perhaps copied by others.
D) monopolists recognize that they must face eventual competition in the long run.

Question 2

If lower-income households spend a greater share of their income on cigarettes than do higher-income households, then a tax that raises the price of cigarettes will

A) cause lower-income households to incur a greater loss of consumer surplus than that incurred by higher-income households.
B) cause higher-income households to incur a greater loss of consumer surplus than that incurred by lower-income households.
C) raise consumer surplus among higher-income households.
D) cause consumer surplus to decline among smokers, but the relative impact cannot be determined from the given information.