If there is a collusive agreement in a duopoly to maximize profit, then the price will
A) equal the marginal cost of production.
B) equal the average total cost of production.
C) be the same as the price set by a monopoly.
D) be the same as the price set by a competitive industry.
C
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A current account deficit can occur if ________, all else equal
A) net national savings equals zero B) net factor income from abroad equals zero C) net exports are negative D) net investment income is negative
Suppose you are currently in the long position of a long-term bond. In this case, to hedge against a capital loss, you would enter into a ________ contract to ________ a long-term bond in the future
A) interest-rate forward; sell B) interest-rate forward; buy C) exchange-rate forward; buy D) exchange-rate forward; sell
Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 400 and WR = 100 and the probability of drought is 0.75. Brandon's risk premium is:
A. 250 units of water. B. 325 units of water. C. 17.5 units of water. D. 18.75 units of water.
The short-run industry supply curve slopes up because
A. the firms eventually experience diseconomies of scale. B. the higher price is needed to get more firms to enter the industry. C. the law of diminishing marginal product applies in the short run. D. wages increase as the industry increases output.