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.
You might also like to view...
As a perfectly competitive firm produces at the point where price equals marginal cost, it has no supply curve, only a supply point
a. True b. False Indicate whether the statement is true or false
Internal causes of an economy's business cycles include
a. housing demand b. war c. extreme weather d. innovation e. multiplier and accelerator interactions
Suppose the current level of output and the interest rate are such that the economy is operating on neither the IS nor LM curve. Which of the following is true for this economy?
A) Production does not equal demand. B) The money supply does not equal money demand. C) The quantity supplied of bonds does not equal the quantity demanded of bonds. D) Financial markets are not in equilibrium. E) all of the above
Despite the outlays by the federal and state governments, many observers believe which of the following is true?
A. Public infrastructure, such as bridges and roads, is only adequate. B. Our educational system is lacking. C. Too little is spent on homeland defense. D. All of these are correct.