Cartels are relatively rare because
A. they are illegal in some countries, including the United States.
B. members find it difficult to agree on key decisions.
C. members frequently have an incentive to cheat on the cartel.
D. All of the responses are correct.
Answer: D
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Under perfect price discrimination the monopolist produces ________ a perfectly competitive market.
A. the same amount of output as a non-discriminating monopolist as well as B. less output than an imperfectly price discriminating monopolist, but more than C. more output than an imperfectly price discriminating monopolist, but less than D. the same amount of output as would
If one state is suffering from acid rain as a result of sulfur dioxide emissions from the industries in a neighboring state, then:
A. state courts can provide adequate remedies. B. the problem is best addressed through federal regulation. C. the individual states can easily reach a solution to the problem. D. the acid rain ceases to be an externality.
A monopoly has two production plants with cost functions C1 = 50 + 0.1Q12 and C2 = 30 + 0.05Q22. The demand it faces is Q = 500 ? 10P. What is the profit-maximizing level of output?
A. Q1 = Q2 = 62.5. B. Q1 = Q2 = 125. C. Q1 = 62.5; Q2 = 125. D. Q1 = 125; Q2 = 62.5.
In a restaurant we can observe people consuming coffee, tea, and juices. All are priced the same. If Ann consumes coffee and Bob consumes a juice, we can conclude that
A. Ann likes coffee more than Bob does, and Bob likes juices more than Ann does. B. Carl, another restaurant guest, will be drinking tea. C. the utility Ann receives from coffee consumption equals the utility that Bob receives from consuming juices. D. Ann derives more utility from coffee than from tea or juices, and Bob derives more utility from juices than from tea or coffee.