Which of the following is NOT a reason why collusion may be hard to sustain?
A. Firms observe their rivals' prices only imperfectly.
B. Marginal costs, and therefore agreed-upon prices, may differ among firms or products.
C. Prices wars in practice may not conform to the predictions of the Bertrand model.
D. The potential profits from collusion can be so high as to create an incentive not to undercut.
A. Firms observe their rivals' prices only imperfectly.
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The Consumer Price Index is a measure of the average of the prices paid by ________ for a fixed basket of consumer goods and services
A) urban consumers B) all consumers C) urban wage earners and clerical workers D) consumers living in cities with a population greater than 100,000
Explain why a monopoly or a perfectly competitive firm does not consider a rival firm's behavior, but an oligopoly and a monopolistically competitive firm do
What will be an ideal response?
Which of the following examples is the only scenario that maximizes profits?
a. Cheap Energy stays at q1.
b. Cheap Energy moves from q1 to q*.
c. Cheap Energy moves from q1 to q2.
d. Cheap Energy stays at q2.
Sam has $500 in traveler's checks. He cashes a $100 traveler check, deposits $150 into his checking account at a Savings and Loan Association, and deposits the remaining $250 into a savings account at a credit union. Immediately, ________
A) M1 decreases by $250 and M2 does not change B) M1 decreases by $400 and M2 increases by $250 C) M1 does not change and M2 increases by $250 D) M1 and M2 do not change