Which of the following explains how a cartel with 100 percent control might raise price to monopoly-like levels?
a. By setting a group output level equal to a profit-maximizing monopolist, and then assigning binding quota shares to cartel members.
b. By setting an official price that members can secretly undercut.
c. By forbidding price competition, but allowing non-cooperative rivalry in output levels.
d. None of the above.
a
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Suppose the daily demand for Coke and Pepsi in a small city are given by QC = 90 - 100PC + 400(PP - PC) and QP = 90 - 100PP + 400(PC - PP), where QC and QP are the number of cans Coke and Pepsi sell, respectively, in thousands per day. PC and PP are the prices of a can of Coke and Pepsi, respectively, measured in dollars. The marginal cost is $0.45 per can for both Coke and Pepsi. If PP = $0.75, what is Coke's demand function?
A. QC = 90 - 400PC B. QC = 390 - 500PC C. QC = 390 - 400PC D. QC = 465 - 400PC
What are the functions for MC and AC if TC = 100q + 100q2? Are the returns to scale increasing, decreasing, or constant?
What will be an ideal response?
The production function in Scenario 7.3 exhibits:
A) decreasing returns to scale. B) constant returns to scale. C) increasing returns to scale. D) all of the above at various levels of output.
Which of the following antebellum transportation innovations earned the greatest rate of return?
a. corporate-owned turnpikes b. the National Road c. the Erie Canal d. the Mainline Canal