Oligopolistic firms engage in collusion to:
A. minimize unit costs of production.
B. realize allocative efficiency, that is, the P = MC level of output.
C. earn greater profits.
D. increase production.
Answer: C
You might also like to view...
Which of the following is the most valid expression of a theory of under consumption as a cause of business cycles?
a. capital goods production encroaches on consumer goods production b. income equals production, but not all income is used for current purchasing power c. people want more goods than the economy is capable of producing; therefore, they must cut their consumption expectations d. the economy provides insufficient purchasing power to buy back the goods it produces
Teddy's Bear Shop operates in a perfectly competitive market where the prevailing price is $15 . Teddy's marginal cost curve crosses his average total cost curve at $20 . The marginal cost curve crosses his average variable cost curve at $17 . In the short run, Teddy's Bear Shop
a. should operate at a lower output level where it can suffer less of an economic loss b. will suffer an economic loss, but should continue to operate at the minimum of its average variable costs c. will just break even, with neither a profit nor a loss, and should operate d. will suffer an economic loss and should shut down e. should operate at a higher output level where it can suffer less of an economic loss
If people who own cats tend to have fewer mice on their property, we can say there is a negative correlation between owning cats and having mice on your property.
Answer the following statement true (T) or false (F)
The rational expectations view that expectations regarding policy and its effects are important to consider:
A. Serves as the primary rationale for the Laffer Curve B. Is now accepted by most mainstream economists C. Is consistent with the monetary rule calling for a constant rate of growth in the money supply D. Is challenged by research indicating that expectations have little economic effect