The cartel model of oligopoly assumes that firms jointly behave as a monopolist in order to maximize joint profits.
Answer the following statement true (T) or false (F)
True
Cartels implicitly or explicitly collude in their pricing decisions in an attempt to maximize industry profits.
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Prohibiting price increases in situations of true scarcity could best be described as
A. interfering with the “law” of supply and demand. B. thwarting the “law” of increasing returns to scale. C. violating the “law” of increasing cost. D. interfering with the “law” of diminishing marginal utility.
Which of the following industries has not undergone deregulation in recent years?
a. steel b. telephone c. airlines d. trucking e. banking
Suppose that MPL = 50 and MPK = 30. If W = 25 and R = 10, then a firm:
A. is producing its output at the lowest possible cost. B. could reduce costs by employing more labor and less capital. C. could reduce costs by employing more capital and less labor. D. could minimize costs by employing more of both inputs.
A firm produces 200 pop-up speakers at an average total cost of $27 and an average variable cost of $24. What is the firm's level of total fixed cost?
a. $3 b. $200 c. $600 d. $4,800