What quantity of output and price do they try to set, when a group of oligopoly firms form a cartel? Will there be any changes in the price and quantity supplied if the cartel gets broken down?
What will be an ideal response?
By forming cartels, oligopoly firms try to set monopoly price and quantity of output. When cartels break down, quantity of output supplied increases and the market price falls.
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The aggregate supply curve of an economy shows the relationship between the: a. price level and the total number of goods that consumers buy during a given period of time
b. goods that are not purchased during a given period and the wealth created during the given period of time. c. amount of investment spending and the market interest rate of an economy. d. price level and the quantity of all goods sellers are willing and able to provide during a given period of time.
Automatic stabilizers have the effect of
a. Increasing aggregate demand when the nation is below full employment. b. Restraining the decline in demand but not stimulating any increase in aggregate demand that would move the nation back toward equilibrium. c. Causing government spending to rise and taxes to rise as a nation moves into a recession. d. Destabilizing a nation, once you consider the active deficits or surpluses they cause.
Volkswagen increases the price of a car produced exclusively for export to North America. Which German price index is affected?
A. the CPI B. the GDP deflator C. both the CPI and the GDP deflator D. neither the CPI nor the GDP deflator
Suppose a plaintiff hires a lawyer to represent her in a court case. Under which of the following contracts is efficiency in risk bearing assured?
A) The lawyer is paid by the hour. B) The lawyer receives a share of the settlement. C) The lawyer receives a fixed fee. D) It is impossible to determine without the degree of risk aversion for each.