If three firms of similar sizes join to form a cartel, then it is most likely that
A. all three firms will stop producing.
B. they will collectively produce more than before.
C. all three firms will earn zero profits.
D. they will charge a common, higher market price.
Answer: D
You might also like to view...
Refer to the figure above. What is the optimal number of machines rented if the market rental price is $5 per month?
A) 20 machines B) 40 machines C) 80 machines D) 100 machines
For most of the unemployed, unemployment spells are ________
A) longer than a year B) longer than 10 years C) permanent D) shorter than three months
If a foreign currency becomes more expensive in United States dollars, we would expect
a. U.S. exports to increase b. U.S. imports to increase c. U.S. exports to remain constant d. U.S. exports to decrease e. the quantity of foreign currency demanded in the United States to rise
Figure 8.3 shows demands and costs for a monopolistically competitive firm. When the firm's demand curve shifts from D1 to D2 and to D3:
A. the firm's economic profit remains the same. B. the firm's marginal revenue at the profit-maximizing output level is decreasing. C. the firm's marginal cost at the profit-maximizing output level is increasing. D. the firm's average cost at the profit-maximizing output level is decreasing.