Cooperation between oligopolistic firms is difficult because
A. each firm has a monopoly power on its own product.
B. firms rarely have mutual interests.
C. firms gain more through competition.
D. each firm has an incentive to "cheat" on the agreements made.
Answer: D
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A vertical aggregate supply schedule implies that
a. real wages cannot impact output. b. unemployment cannot impact output. c. aggregate demand is horizontal. d. the price level does not impact output.
If Happy Campers and Camping R Us are camper suppliers in tacit collusion and Happy Campers launches a new advertising campaign that states that it will meet any competitor's price on a comparable camper, Happy Campers might be tacitly signaling to Campers R Us that they are willing to ________.
A) maintain current the price B) cut price is exactly half C) raise their price D) lower their price
In the Keynesian model in which the Keynesian short-run aggregate supply curve exists
A) the short-run aggregate supply curve determines real GDP. B) the aggregate demand curve determines the price level. C) unemployment cannot persist for long periods of time. D) aggregate demand determines real GDP per year.
Suppose the nation's price level rises as a result of an increase in aggregate demand and a decrease in aggregate supply which leaves output unchanged. If the Fed is required to follow a rule that stabilizes the price level, what will the Fed do to the money supply and what impact will this have on total output in the economy?