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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Which of the following countries received a loan from the IMF in November 2008?
A) Japan B) China C) Hungary D) Mexico
Economies of scale can benefit consumers to the extent that the costs of production incurred by the firms in the industry are lower than they would otherwise be
At the same time, the price-setting power of those firms is increased, which could hurt consumers. Indicate whether the statement is true or false
Academic book publishers hire editors, designers, and production and marketing managers who help prepare books for publication. Because these employees work on several books simultaneously, the number of people the company hires will not go up and down
with the quantity of books the company publishes during any particular year. The salaries and benefits of people in these job categories will be included in A) fixed cost and marginal cost but not variable cost. B) fixed cost but not variable cost and total cost. C) marginal cost and total cost but not fixed cost. D) fixed cost and total cost but not variable cost.
The argument that demand for apartments is more elastic in the long run is based on the idea that
A. landlords will fix up many new apartments when there are small changes in rent. B. it takes time to build new apartments. C. people will change apartments more readily when there is only a short time to benefit from lower rent. D. it is costly to move quickly to a different location.