Why do cartels often break down?
What will be an ideal response?
Cartels often break down because of the incentives for each individual member of the cartel to reduce its own price slightly and increase its production in order to reap more profits than those under a cartel agreement. Also, economic profits due to the cartels often provide an incentive for new firms to enter the market and act as a cheating cartel member.
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The simultaneous imposition of a 3 cent sales tax and a 5 cent excise tax on the sale of a cup of coffee would have the same effect on coffee sales as:
a. a 2 cent subsidy. b. a 2 cent excise tax . c. a 3 cent excise tax . d. an 8 cent excise tax.
U.S. real GDP per person grew rapidly in the early 1960s. The table above has U.S. real GDP and population for 1961 and 1962
a. What was U.S. real GDP per person in 1961? b. What was U.S. real GDP per person in 1962? c. Between 1961 and 1962, how rapidly did U.S. real GDP per person grow?
The cost of debt can be found on a firm's
A) 1099 form. B) 5013c release. C) balance sheet. D) 10K.
How can bonuses to exceptional employees be considered economic rents?