Multiple Choice
Suppose Ford, GM, and Chrysler produce all the pick-up trucks in the United States. If they all are priced at $30,000 and Ford introduces a $5,000 rebate, what can Ford expect to see?
A) GM and Chrysler go out of business
B) an immediate rebate or price-cut response by GM and Chrysler
C) a long-run shift of industry profit from GM and Chrysler to Ford
D) an unprecedented increase in Ford truck sales in the long-run
E) an increase in GM and Chrysler production to compensate for loss of profit
Correct Answer:
Verified
Correct Answer:
Verified
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