Explain how a large number of firms in the industry and product heterogeneity affect the likelihood of cartel success
Cartel cheating is more likely if there are many firms, as it's difficult to monitor an agreement and see when sales are lost to a rival. Product heterogeneity also adds to cartel difficulties, since firms can vary quality to attract customers at a given price. If all firms sell an identical product, cheating is easier to detect.
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Which is NOT an example of signaling high quality in a social setting
a. wearing everyday clothes to a job interview b. leaving a big tip for the waiter after a dinner date c. offering an expensive engagement ring to your bride d. Visiting the beauty salon before a big date
The long-run aggregate supply curve
A. shows that long-run aggregate supply equals potential real Gross Domestic Product (GDP). B. is very sensitive to changes in the price level. C. slopes up and to the right. D. shows that at higher prices, potential real Gross Domestic Product (GDP) increases.
Assume government policy increases the demand for corn
A) The consumer surplus of corn buyers will increase. B) The producer surplus of corn growers will decrease. C) The producer surplus of corn growers will increase. D) The producer surplus of corn growers will not change.
The opportunity cost of funds is the interest that can be earned by lending the funds
Indicate whether the statement is true or false