Price leadership is a form of
A. tacit collusion.
B. explicit collusion.
C. monopolistic competition.
D. a cartel policing mechanism.
Answer: A
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Refer to Figure 8.3. The marginal cost of the ninth basketball is A) less than $2. B) $2. C) $3. D) greater than $3.
Suppose there are only three consumers in the market for a good and each consumer will buy only one unit of the good. Their individual economic values for the good are $6, $8, and $12, respectively. If the market price for the good is $10, what is the total consumer surplus for the three buyers?
A. $6 B. $12 C. $4 D. $2 E. $8
If the government imposes a price ceiling below the monopolist's average cost curve, then in the long run the regulation makes:
A. consumers worse off. B. consumers better off. C. the monopolist better off. D. None of the statements is correct.
Which of the following is illegal according to the antitrust laws?
A) output restrictions B) price discrimination based on cost differences C) vertical mergers D) price fixing