Answer:
Financial Markets by Coursera
Explanation:
Answer: The corrects answers are: "a. If both firms are localized in position 1/2 (i.e., center of the line), neither firm has incentives to deviate and move to a different position.", "c. If Firm localize at the same point along the line, they will each sell to 50% of the consumers." and "d. If Firm 1 is located at position 1/2 (i.e., center of the line) and firm 2 is located somewhere else, then both firms have incentives to deviate and change their position along the line.".
Explanation: According to the Hotelling model of the competition between two firms:
a. If both firms are localized in position 1/2 (i.e., center of the line), neither firm has incentives to deviate and move to a different position. - If this were the case, it would be indifferent for customers to go to either.
c. If Firm localize at the same point along the line, they will each sell to 50% of the consumers. - This happens because each consumer will go to the nearest one.
d. If Firm 1 is located at position 1/2 (i.e., center of the line) and firm 2 is located somewhere else, then both firms have incentives to deviate and change their position along the line. - This happens because the strategy chosen is not suitable for either company.
Answer:
The answer is:
1. consumers' expenditure increases by $150 billion
2. output will decrease by $600 billion
Explanation:
Tax impact:
$300 billion x 0.5
= $150 billion.
If taxes are lowered by $300 billion, consumers' expenditure increases by $150 billion because with lower tax, there is money money to be spent because their disposable income has increased.
Government spending impact:
$300/(1-0.5)
$300/0.5
=$600 billion.
Due to government spending that has increased by this amount, output will decrease by this amount too because government has directly competed with firms that should have used this money to increase the total output.
Therefore, net effect on total output is $300billion($600 - $300)
These illustrations highlight the influence of competitive elements as a component of the external environment.
<h3>Is competition a part of the external environment?</h3>
By definition, the external environment includes all external forces and influences that have an impact on how businesses operate. Competitive, political, technological, and economic issues are included in the business environment variables.
<h3>What does external competition entail?</h3>
A business competes and operates in a dynamic external system known as a competitive environment. The marketplace in which you compete will be more competitive the more vendors there are of a given good or service.
<h3>Which elements influence the competitive environment?</h3>
From a microeconomics perspective, there are five fundamental variables that might affect competition: the characteristics of the product, the number of sellers, entrance barriers, the accessibility of information, and location.
learn more about competitive factors as part of the external environment here<u> brainly.com/question/15071676</u>
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