What makes it extremely difficult for cartels to function effectively without government assistance?
A) Cartel members cannot agree among themselves on the optimum price because all have different costs.
B) High prices encourage cartel members to offer discounts, and they attract new entrants to the industry.
C) Marginal cost will not equal marginal revenue except at output levels beyond the cartel's capacity.
D) Public interest considerations usually require an output greater than the cartel's net revenue maximizing output.
E) The hostility of the public to price exploitation makes it difficult for the cartel to defend itself against the consequences of popular hostility.
B
You might also like to view...
What do antitrust laws enable the government to do?
a. Break up large firms into smaller ones b. Acquire a controlling percentage of large firms c. Require firms to sell off profitable operations d. Block all mergers and acquisitions by foreign firms
During 1980 through 2010,
a. the per capita income of high-income industrial countries declined. b. the fastest growing economies in the world were LDCs. c. almost all LDCs grew more rapidly than the high-income industrial economies. d. most of the countries with rapid growth rates during the last two decades were located in South America.
If the exchange rate between two countries is expected to remain fixed at its current rate, then
A) output growth rates must be equal in the two countries. B) price levels must be equal in the two countries. C) inflation rates must be equal in the two countries. D) nominal interest rates must be equal in the two countries. E) none of the above
An increase in the U.S. GDP will result in
A. an increase in exports of the United States. B. an increase in imports of the United States. C. an increase in the dollar exchange rate and a decrease in imports of the United States. D. an increase in the dollar exchange rate and a rise in imports of the United States.