Suppose the only three existing manufacturers of video game players signed a written contract by which each agreed to charge the same price for products and to distribute their products only in the geographical area assigned them in the contract. This
best describes:
A. cost-plus pricing.
B. multiproduct pricing.
C. a cartel.
D. price leadership.
Answer: C
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Producer surplus is measured as the
A) area under the demand curve above market price. B) entire area under the supply curve. C) area under the demand curve above the supply curve. D) area above the supply curve up to the market price.
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5 . Eleven sellers are also willing to sell at the same prices. If the market maker is free to choose the number of transactions he can make, what is his maximum profit?
a. $8 b. $10 c. $18 d. $28
If a price floor of $23 were placed in the market in the graph shown, which area represents deadweight loss?
A. C + F
B. C + D + F
C. G
D. B + C + E + F
Knowledge has become measurably more important in today's economy
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