An Increase in Marginal Cost That Remains Within the Gap

question 80

Multiple Choice

An increase in marginal cost that remains within the gap of the marginal revenue curve of a kinked demand oligopolist will:

• A) keep price and output the same.
• B) raise price and decrease output.
• C) lower price and increase output.
• D) raise price and raise output.
• E) lower price and lower output.

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Definitions:

Business Combination

A transaction or event in which an acquirer obtains control of one or more businesses.

Acquiring Companies

Companies that acquire control of other companies by buying a majority of their stocks or assets, effectively making them subsidiaries.

Issued Capital

The total value of a company’s shares that have been issued or sold to shareholders.

Net Assets

The total assets of a company minus its total liabilities, indicating the actual value of a company's equity.