In a price leadership oligopoly model,
A. a cartel of leading firms determines price and industry output.
B. the industry in consortium with the government determines price and output.
C. one firm is the price leader and all other firms follow.
D. the firms abandon a profit-maximizing goal.
Answer: C
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A major cause of environmental degradation in developing countries is
(a) debt for nature swaps. (b) poverty. (c) a lack of public transportation. (d) land reform.
As the price of a good rises:
A. firms generally decrease the supply of the good. B. government regulation becomes more justified. C. firms generally increase the supply of the good. D. more firms can cover their opportunity cost of producing the good.
In a short-run production function before diminishing returns set in, both MPL and APL will have
A. negative slopes and MPL will lie above APL. B. positive slopes and MPL will lie above APL. C. positive slopes and APL will lie above MPL. D. negative slopes and APL will lie above MPL.
What is likely to occur over the long run if it is easy for new firms to enter an oligopolistic industry?
a. The general level of prices will begin to approach average total cost. b. The general level of prices will rise well above average total cost. c. It will become easier for a cartel to form consensus about pricing decisions. d. The industry will become more oligopolistic and could trigger an antitrust probe.