What is a cartel? Can cartels generate long-term profits without the existence of barriers to entry?
What will be an ideal response?
A cartel is an association of producers in an industry that agree to set common prices and output quotas to prevent competition. If they successfully earn profits, new firms will enter, so barriers to entry are still needed.
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What is true about dominant strategies in the game in Scenario 13.11?
A) R1 and C1 are dominant strategies. B) R1 and C2 are dominant strategies. C) R2 and C1 are dominant strategies. D) R2 and C2 are dominant strategies. E) There are no dominant strategies.
The price elasticity of demand measures
A. how responsive consumers are to a change in income. B. changes in demand. C. how responsive consumers are to a change in price. D. how responsive market prices are to a change in demand.
When costs spill over to third parties, there is a(n)
A) cost overrun. B) excessive competition. C) negative externality. D) government subsidy.
For a given price level, an upward shift of the expenditures schedule corresponds to an
a. inward shift of the aggregate demand curve. b. outward shift of the aggregate demand curve c. outward shift of the aggregate supply curve. d. inward shift of the aggregate supply curve.