Explain how collusion makes firms better off. Given the incentives to collude, briefly explain why every industry does not become a cartel
What will be an ideal response?
Collusion makes firms better off because if they act as a single entity, like a monopoly, they can reduce output, increase prices, and increase profits. Among the reasons that every industry doesn't become a cartel are that the high profits caused by collusion will induce new firms to enter the industry; because each member of the cartel has an incentive to "cheat" on the collusive agreement, earning the highest profit by producing more than its share when everyone else sticks with the collusive agreement; and because collusion is illegal in the United States and many other countries.
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Roughly 160 million people in the United States hold jobs.
Answer the following statement true (T) or false (F)
Refer to Figure 26-5. In the figure above, the movement from point A to point B in the money market would be caused by
A) an open market sale of Treasury securities by the Federal Reserve. B) an increase in the price level. C) a decrease in real GDP. D) an increase in the required reserve ratio by the Federal Reserve.
If the money multiplier is 3 and the Fed buys $50,000 worth of bonds, what happens to the money supply?
a. it increases by $100,000 b. it increases by $150,000 c. it decreases by $100,000 d. it decreases by $200,000
Which of the following is the primary source of rapid growth in the real earnings of workers?
a. increases in the minimum wage b. government regulation of labor markets c. strong unions d. rapid growth in worker productivit