The colluding oligopoly will face market demand and produce up until the point at which
A. price and marginal cost are equal and price will be set equal to marginal cost.
B. marginal revenue and marginal cost are equal and price will be set above marginal cost.
C. marginal revenue and marginal cost are equal and price will be set below marginal cost.
D. price and marginal revenue are equal and price will be set below marginal cost.
Answer: B
You might also like to view...
Suppose leisure is on the horizontal axis and dollars are on the vertical axis in the consumer-choice diagram. What happens to the budget line when a head tax is imposed?
a. The budget line shifts inward, but it may become steeper or flatter depending on the size of the head tax.
b. The budget line pivots about the horizontal intercept, becoming steeper.
c. The budget line become flatter, with the vertical intercept falling and the horizontal intercept remaining fixed.
d. There is an inward, parallel shift in the budget line.
If a country's GDP increases and all other variables remains constant, ________
A) its income per worker will increase B) its income per capita will fall C) its GNP will fall D) its trade surplus will increase
If consumers were able to receive the full social benefits associated with the consumption of goods involving positive externalities, other things being equal, there would probably be: a. an increase in consumption
b. a decrease in consumption. c. a greater misallocation of resources. d. a decrease in the market price of the product.
Under perfect competition, the market mechanism, without any government regulation, is capable of
a. allocating resources efficiently. b. solving equity problems. c. making the average cost of labor equal to the average cost of all commodities. d. making more income available to the poor.