In general, firms in a cartel:
A. agree to set price equal to marginal cost.
B. do not consider the actions of the other firms in the cartel when making output decisions.
C. produce levels of output exceeding the monopoly output level.
D. agree to charge the price the monopolist would charge.
Answer: D
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A) k. B) j. C) kj. D) k - j. E) 0.
What is the nature of the elasticity of the demand curve faced by perfectly competitive firm?
A. Perfectly inelastic B. Perfectly elastic C. Unit elastic D. Highly elastic
For a perfectly competitive firm, the long-run supply curve is the long-run average cost curve
a. True b. False Indicate whether the statement is true or false
All else equal, what happens to consumer surplus if the price of a good decreases?
a. Consumer surplus increases. b. Consumer surplus decreases. c. Consumer surplus is unchanged. d. Consumer surplus may increase, decrease, or remain unchanged.