Geoff Hesitated as He Read the Fast Food Menu, Unsure

question 70

Multiple Choice

Geoff hesitated as he read the fast food menu, unsure whether he should supersize his order of delicious golden French fries. Doing so would increase his cost from $0.99 to $1.59 and just might provide him the nutrition he needed to make it through the second half of his day at the office. Of course, if he finished his hamburger and the usual amount of fries, he would simply throw the extra ones away. However, if he failed to supersize his order, he would have to take a candy bar break mid-afternoon and they weren't exactly giving them away in the break room vending machines. He would likely need two candy bars, which sold for $0.95 each. What is Geoff's target service level?

• A)0.29
• B)0.61
• C)0.76
• D)0.87

Understand the concept of tacit collusion and how it operates without formal agreements.

Recognize the inefficiencies and legal implications of collusion and cartels in the U.S. economy.

Identify the historical context and evolution of oligopoly in the United States.

Understand the Nash equilibrium in the context of oligopoly behavior.

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Definitions:

Economic Contraction

A decline in national output as measured by GDP, often marked by a decrease in spending, investment, and general economic activity.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing and able to sell at a given overall price level in a given time period.

Aggregate Demand

The total demand for all goods and services within a particular market or economy at a given overall price level and in a given period.

Real Exchange Rate

Measures the value of goods in one country compared to those in another, adjusting for price level differences.