Refer to the information below. If the firms' managers form a price -fixing cartel that maximizes the firms' total profit, what is price charged in the market?
A small nation has three gasoline suppliers with a linear monthly market demand equal to: Q = 500,000 - 5P. Each firm's marginal cost (MC) and average total cost (ATC) curves are horizontal at $10,000 per month.
A) $100,000 B) $10,000 C) $55,000 D) $5,500
C) $55,000
You might also like to view...
How were exchange rates determined under the gold standard? How did the Bretton Woods system differ from the gold standard?
What will be an ideal response?
Refer to Figure 4-5. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the area representing producer surplus after the imposition of the price floor?
A) B + C + D + E + F B) A C) B + D + F D) C + E
How do we know when a market is contestable?
What will be an ideal response?
Absolute advantage governs the potential for gains from trade
a. True b. False Indicate whether the statement is true or false