Daryl's Inc has formed a cartel with the two other firms in its industry. In which of the following market structures does Daryl's operate?
A) monopolistic competition
B) oligopoly
C) perfect competition
D) monopoly
E) legally protected monopoly
B
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Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. What is the amount of the deadweight loss?
A. $8,888.89 B. $2,222.22 C. $1,333,33 D. $4,444.44
Identify the externality that arises when basic research leads to new general knowledge. Is the externality positive or negative?
Special interest groups are usually
A) well informed on all political issues. B) well informed on all economic issues. C) well informed on issues of interest to them. D) not well informed on any issues, but appear to be.
One condition for private bargaining to occur, according to the Coase theorem, is that there must be:
A. government creation of a market for externalities. B. government intervention to establish bargaining. C. many people affected and involved. D. clearly established property rights.