After participating members of a cartel form an agreement on common prices and output quotas, then an individual firm can increase its own profits by
A) decreasing production.
B) decreasing prices.
C) advertising.
D) paying its employees higher wages.
Answer: B
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Answer the next question based on the demand and cost schedules for a monopolistically competitive firm given in the table below.PriceQuantity DemandedTotal CostOutput$201$101182202163293144364125405106426What output quantity will the monopolistically competitive firm produce to maximize profits?
A. 3 B. 5 C. 6 D. 2
Explain the effect of a usury law.
What will be an ideal response?
Identify the best reason for regulating a natural monopoly
a. A natural monopoly can serve the entire market at a lower average cost than if two or more smaller firms split the market and compete against each other. Thus consumers can benefit from the existence of monopoly, and regulators must protect consumers by regulating the monopoly's price. b. A natural monopoly is a high-cost producer that creates significant employment opportunities in an economy. Thus regulators must protect them from competition. c. A natural monopoly is a large firm whose production depends largely on the natural resource endowment in a country. Regulators must control the prices of their products to help them maintain the high cost of sustainable resource management. d. A natural monopoly is a large firm that creates negative production externalities in an economy. Thus regulators impose lumpsum taxes on their produce and redistribute the proceeds to correct these negative externalities.
The monopolist's demand curve is:
A. identical to the market demand curve. B. identical to the marginal revenue curve. C. below the marginal revenue curve. D. a horizontal line at the market price.