Even though a cartel is often profitable for its members, cartel arrangements contain the seeds of their own disintegration because
a. a price maintained above each cartel member's marginal cost provides each member with an incentive to offer secret price reductions to attract additional customers.
b. the profits earned by cartel members will induce others to enter the industry.
c. cartel members will attempt to garner more of the total profit for themselves by cheating on their agreement with other members.
d. all of the above are correct.
D
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Consider the above figure. At income level Yd = $30, the APC is equal to
A) 0.05. B) 1.05. C) 1.25. D) 1.67.
A marginal tax rate is calculated as
A) change in taxes paid ÷ the change in total taxable income. B) change in taxable income ÷ change in taxes paid. C) taxes paid ÷ total taxable income. D) total taxable income ÷ by taxes paid.
Refer to the above figure. Which panel represents the long-run situation for a monopolistically competitive firm?
A) Panel A B) Panel B C) Panel C D) Panel D
Use the above table and assume a fixed cost of $200. At an output of 3, AVC is
A. $133.
B. $167.
C. $200.
D. $500.