Under what situations will a colluding firm cheat?
What will be an ideal response?
A colluding firm will cheat if it can cheat without being detected or punished. A colluding firm can also cheat if it is in danger of bankruptcy. In addition, if the government outlaws a product, then firms selling that product will know that on the last day of legal sales, no individual firm has an incentive to continue playing a cooperative strategy. Therefore, these firms are likely to cheat.
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Economists believe that political instability can facilitate economic development in an LDC by making its citizens more open to change and new technology
Indicate whether the statement is true or false
If the price of a motorcycle is $5,000 . and workers who make motorcycles earn a wage rate of $50, how many workers will be hired when the labor market is in equilibrium?
a. There is not enough information to determine how many would be hired. b. Hiring will continue until the price falls to $50 . c. Hiring will continue until the wage rate rises to $5,000. d. Hiring will continue until the MRP of the worker is greater than zero. e. Hiring will continue until the MPP of the last worker is 0.01 motorcycles.
The value of a business owner's time is an example of
a. an opportunity cost. b. a fixed cost. c. an explicit cost. d. total revenue.
Which of the following occurs in the long run neoclassical growth model without technological change?
A. Capital deepening ceases. B. Real wages stop growing. C. The return to capital is constant. D. Real interest rates are constant. E. All of the above.