In the highly competitive setting in which oligopoly firms operate, which of the following are considered to be typical temptations for firms?
A. to cooperate to generate and then divide up monopoly-like profits
B. to cooperate to mutually decide what price to charge
C. to cooperate to make decisions about what quantity to produce
D. all of the above
Answer: D. all of the above
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Suppose all firms in an industry are identical. In the long run, entry and exit guarantee that all firms will have zero
a. marginal cost. b. average cost. c. economic profit. d. accounting profit.
According to the graph shown, if this economy were an autarky, consumers would get area:
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
A. A in consumer surplus.
B. ABC in consumer surplus.
C. ABCD in consumer surplus.
D. ABCDEFG in consumer surplus.
According to Gary Becker's "Rotten Kid theorem," a child will be deterred from stealing from his siblings
a. as long as he fears that his parents will punish him. b. when parents are altruistic and treat their children equally. c. only if the probability of being caught is sufficiently large. d. if he inherits the "altruistic gene" from his parents.
Data on income inequality in the United States indicate that
a. rich families stay rich and poor families stay poor. b. most poor families never significantly rise above the poverty level, but rich families tend to become less wealthy over time. c. there is substantial movement among income groupings in the United States. d. the inequality between the rich and poor in annual consumption expenditures is greater than the parallel inequality in annual income.