Cartels are inherently self-destructive because each member firm has the incentive to cheat on the cartel agreement
What will be an ideal response?
True. Unless the cartel can establish mechanisms to detect and punish cheaters, the agreement will fail.
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If, for a product, the quantity supplied exceeds the quantity demanded, the market price will fall until
A) all consumers will be able to afford the product. B) the quantity demanded exceeds the quantity supplied. The market will then be in equilibrium. C) quantity demanded equals quantity supplied. The equilibrium price will then be lower than the market price. D) quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.
The shape of the average total cost curve is determined by the shape of
A) the firm's production function. B) the average fixed cost curve. C) the marginal cost curve. D) the average product curve.
All of the following are possible characteristics of a monopoly except:
A) there is a single firm. B) the firm is a price taker. C) the firm produces a unique product. D) the existence of some advertising.
A unit tax has an advantage over an ad valorem tax in situations when _____
a. inflation is high b. it is easy to estimate the value of the good being taxed c. it is difficult to estimate the value of the good being taxed d. inflation is low