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Introduction to Industrial Organization, second edition 2nd Edition By Luis M. B. Cabral 9780262035941 Chapter 1-16 Complete Guide . $17.99   Add to cart

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Introduction to Industrial Organization, second edition 2nd Edition By Luis M. B. Cabral 9780262035941 Chapter 1-16 Complete Guide .

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Introduction to Industrial Organization, second edition 2nd Edition By Luis M. B. Cabral 9780262035941 Chapter 1-16 Complete Guide .

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  • August 22, 2024
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Test Bank For Introduction to Industrial Organization, second
edition 2nd Edition By Luis M. B. Cabral 9780262035941
Chapter 1-16 Complete Guide .

What are the types of firms? - ANSWER: Sole Proprietorship

Partnership

Corporations

Who is responsible for debt in each type of firm? - ANSWER: Sole Proprietorship - owners

Partnership - owners

Corporations - liability does not extend to personal assets

Why were corporations created? - ANSWER: In response to the need to increase in size and raise
money

What do corporations separate? - ANSWER: Ownership and control

How do corporations solve the incentive incompatibility program? - ANSWER: Tie the compensation
of the manager to the performance of the firm

What does a increase in a firm size bring? - ANSWER: Lower transaction, transportation, and
communication costs.

What do pros do mergers bring? - ANSWER: Economies of scale

q (2L,2K) > 2q (L,K)

q= ouput
L= Labor
K= Capital

economies of scope

Saving in management costs

What are economies of scope? - ANSWER: Cheaper to produce when producing several types of
output

What is a con of mergers? - ANSWER: A decrease in taxes

What are the two types of coordinations within corporations? - ANSWER: Voluntary Cooperation -
due to social sanctions

Involuntary Cooperation - forced through contracts

How do you determine if you should buy a capital asset? - ANSWER: If The PV of the marginal product
of the asset is greater than the sticker price

Are a firm's cost fixed or variable in the long run? - ANSWER: Variable

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