-Refer to the Figure Above

question 1

Multiple Choice

-Refer to the figure above. At a price of $70, which of the following is true?

• A)The quantity demanded exceeds the quantity supplied.
• B)The quantity supplied exceeds the quantity demanded.
• C)There is a shortage of the sunglasses.
• D)The quantity demanded equals the quantity supplied.

Recognize the application of the Prisoners' Dilemma in describing oligopolistic market outcomes.

Identify different market structures, including the dominant firm model and the kinked demand curve model.

Calculate profit maximizing price and output levels under various cost and demand scenarios.

Analyze the assumptions and implications of the kinked demand curve model.

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Definitions:

Inflation Rate

The rate at which the overall cost of goods and services rises over a given time frame.

Base Year

A reference year against which economic growth, inflation, or other economic indicators are measured.

Quantities

The amount or number of a material or item measured or produced.

GDP Per Person

A measure of a country's economic output (Gross Domestic Product) divided by its population, indicating the average economic productivity per person.