Other things equal, cartels and similar collusive arrangements are easier to establish and maintain:
A. when there are ample opportunities for the firms to make secret price concessions to
selected buyers.
B. during periods of business-cycle stability and full employment.
C. when the demand and cost conditions of the participating firms differ substantially.
D. when the number of firms is relatively large.
Answer: B
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The figure below shows the retail demand for running shoes. If the distributor (the retailer) is a monopoly and the marginal cost of distributing the shoes is $20 per pair, the manufacturer's wholesale demand curve lies
A) $20 below the retail demand curve, D.
B) $20 below the retail marginal revenue curve, MR.
C) $20 above the retail demand curve, D.
D) $20 above the retail marginal revenue curve, MR.
A right-to-work law makes it illegal for
A) employers to refuse to hire union workers. B) union membership to be a requirement for continued employment in any establishment. C) union membership to be denied on the basis of race, gender, or national origin. D) a union to exist in a state.
If demand were inelastic, then we should immediately:
a. cut the price. b. keep the price where it is. c. go to the Nobel Prize Committee to show we were the first to find an upward sloping demand curve. d. stop selling it since it is inelastic. e. raise the price.
Differentiate between rational expectation and adaptive expectation using suitable examples