Author Question: Suppose a firm that sells a variety of athletic shoes is trying to start a pattern of price ... (Read 56 times)

itsmyluck · **on:** Jun 30, 2018

Suppose a firm that sells a variety of athletic shoes is trying to start a pattern of price leadership in its market. Which of the following is not a problem this firm might have to face?
a. Rivals recognize the intent of its actions.
b. Other firms may not necessarily follow the leader.
c. Other firms may not follow the leader but offer better service instead.
d. Differentiation among products allows for more variation in price.
e. The price leader must keep costs lower than other firms'.

Question 2

Government bureaus, unlike private firms,
a. derive their revenue by selling output to the government
b. have incentives to respond to consumers' desires
c. price their output by equating marginal cost and marginal revenue
d. attempt to achieve zero profit
e. receive little consumer feedback