Why do firms form a cartel? How do cartels achieve their goals?
What will be an ideal response?
Firms form a cartel in order to maximize their combined profits by acting as a single producer. To do so, they agree on setting common prices and output quotas for participating members.
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The long-run Phillips curve is ________ than the short-run Phillips curve
A) flatter B) steeper C) more volatile D) less stable
When price equals marginal cost
A) firms make zero profits. B) firms make positive profits. C) the industry is in long-run equilibrium. D) the marginal benefits of consuming an extra unit of the good exactly equals the marginal cost to society of producing the good.
You are part of a local community theater group. Its goal is to raise as much revenue as possible. Mary suggests raising ticket prices. Is she right?
a. yes if the demand for tickets is price inelastic b. no if the demand for tickets is price inelastic c. yes because raising prices always increases revenue d. no because raising prices reduces sales and revenue e. most likely because the demand curve for theater tickets is typically inelastic
In the fall of 2008, the Federal Reserve lowered its target for the federal funds rate to nearly 0 percent. What is the name of the group within the Federal Reserve that made this decision?
A. Federal Funds Operating Group B. Federal Advisory Committee C. Federal Deposit Insurance Corporation D. Federal Open Market Committee