In a cartel, how does the number of firms affect the likelihood that the cartel will be able to successfully maintain a high price?
What will be an ideal response?
The more firms that are involved in the cartel, the lower the likelihood that the cartel will be able to maintain a high price. Essentially, the larger the number of firms, the greater the probability that someone will cheat!
You might also like to view...
Government polices aimed at changing the underlying structure or institutions of the nation's economy are called:
A. trade policy. B. structural policy. C. fiscal policy. D. monetary policy.
Lynne teaches violin lessons. She charges $10 for each lesson. Her marginal cost per lesson is $4, and her ATC per lesson is also $4 . If she can increase the number of lessons she teaches and still charge $10 per lesson, should she? How will she know when she is maximizing her profit?
Which of the following countries have the highest per person income levels?
a. Argentina, Brazil, and Mexico b. China and India c. France and Germany d. Ireland, Norway, and the United States
Assume that there are two parties to an exchange and that they value the goods they would receive as much as the goods they would give away. What do economists call this?
a. A coincidence of coinage b. A coincidence of wants c. An exchange d. Transactions costs e. An alignment of barter