"If firms in duopoly collude and operate as a monopoly, the industry produces more output compared to the Nash equilibrium." True or false? Explain
What will be an ideal response?
The statement is false. In the Nash equilibrium, both firms cheat and output is the same as in perfect competition. If the firms operate as a monopoly, the industry's profit-maximizing level of output is below the competitive level.
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Refer to the scenario above. Which of the following would have happened if the government had decided to provide an export subsidy on these cash crops?
A) The volume of exports would have decreased. B) The government's revenue would have increased. C) Domestic producers would have been better off. D) Domestic consumers would have been worse off.
If it is a cultural norm to practice an afternoon "siesta" (nap), it is likely that the labor:
A. demand in that culture would be relatively greater at any wage. B. demand in that culture would be relatively lower at any wage. C. supply in that culture would be relatively greater at any wage. D. supply in that culture would be relatively lower at any wage.
If marginal cost is ______ average cost, then average cost will _____.
A. equal to; decrease B. less than; increase C. greater than; decrease D. greater than; increase
Self-interest relates to
A) only monetary objectives. B) both monetary and nonmonetary objectives. C) the ceteris paribus assumption. D) normative economic analysis and not positive economic analysis.