Exhibit 9-6 Two-Firm Payoff Matrix
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Assume costs are identical for the two firms in Exhibit 9-6. If both firms were allowed to form a cartel and agree on their prices, equilibrium would be established by:
A. Widget Co. charging the low price and Ajax Co. charging the high price.
B. Widget Co. charging the high price and Ajax Co. charging the low price.
C. Widget Co. charging the low price and Ajax Co. charging the low price.
D. Widget Co. charging the high price and Ajax Co. charging the high price.
Answer: D
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a. elastic supply and demand curves. b. inelastic supply and demand curves. c. inelastic supply and elastic demand. d. elastic supply and inelastic demand.
Which of the following is antitrust legislation?
A. Lanham Act B. Securities and Exchange Act C. Sherman Act and Lanham Act D. Sherman Act
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