Suppose the market for home-grown peppers in the town of Smallville is comprised of two farmers. Explain why they might try to collude
The two farmers might try to collude about quantities to produce or prices to charge. Specifically, they might try to determine the equilibrium price and quantity of peppers that a monopolist would charge and produce, respectively. If they could collude to produce the monopoly output and charge the monopoly price, jointly they would earn the highest profits.
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Which of the following statements is true of free riding?
A) Free riding is easy to detect and punish. B) Free riding reduces with social pressure. C) Free riding is not affected by incentives. D) Free riding does not impose a cost on society.
A key theme fundamental to all of economics is:
A) there are limited wants. B) we are a rich country but are simply not aware of it. C) people have unlimited wants facing limited means to satisfy them. D) there are unlimited resources.
Refer to Figure 22.2 for a perfectly competitive firm. The profit-maximizing quantity of output is
A. B. B. C. C. D. D. E.
Advocates of stabilization policy prefer quick medicine for economic ills. This leads some observers to favor fiscal policy while others endorse monetary policy. Describe the positions of each side in the debate and what seems to be the current consensus.
What will be an ideal response?