In which of the following situations is cheating on a collusive agreement is most likely?
a. Prices are publicly posted.
b. There are few sellers in the market.
c. The market demand curve is elastic.
d. There are economies of scale.
e. Prices are difficult for competitors to observe.
E
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The equilibrium increase in marginal costs for firms resulting from the imposition of a price floor will be larger the more inelastic the price elasticity of demand is.
Answer the following statement true (T) or false (F)
Which of the following would reduce the labor force participation rate, all else equal?
A) an increase in the working-age population B) an increase in the unemployment rate C) a decrease in the unemployment rate D) an increase in the number of people in the labor force
Which of these statements about cartel pricing power is true?
A. The larger the share of world production controlled by the cartel, the higher the price set by the members will be. B. The more inelastic the market demand for the cartel's product, the lower will be the price that the cartel members can charge to maximize profits. C. The larger an unexpected increase in unsold inventories is, the higher the price set by the cartel members will be. D. The greater the elasticity of supply of the non-cartel members, the higher the price set by the cartel members will be.
With a voluntary export restraint (VER), the economic rent created by the quantitative limit on trade is collected by:
a. The government of the importing county. b. Consumers in the importing country. c. Producers in the importing country. d. Exporting firms in the exporting country.