A cartel maximizes industry profit by:
A. eliminating quotas.
B. producing at the kink in its demand curve.
C. producing where MR = MC.
D. producing more output than a monopoly would.
Answer: C
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In the 1937-1938 economic downturn
A. the number of unemployed rose dramatically by about 5 million. B. industrial production fell by 30 percent. C. presidential as well as Federal Reserve policy helped to cause the decline. D. All of the choices are true.
Economists use the mechanism of supply and demand to study
A. inflation. B. unemployment. C. environmental protection. D. All of these responses are correct.
When neither player has a dominant strategy
A) game theory will not provide information. B) no Nash equilibrium exists. C) at least one Nash equilibrium exists. D) the game cannot be analyzed.
If the supply of and demand for a product decrease at the same time, then equilibrium
A) quantity and equilibrium price must both decline. B) quantity must decline, but equilibrium price may either rise, fall, or remain unchanged. C) price must fall, but equilibrium quantity may either rise, fall, or remain unchanged. D) quantity must fall and equilibrium price must rise.