Two firms would sometimes be better off if they got together and agreed to charge a high price, rather than to compete and risk having to charge a lower, competitive price. What is the greatest deterrent to this strategy?
A) One of the firms may decide to lower its price and take business away from the firm that charged the high price.
B) The firms may find that the price they charge is greater than the price that would maximize their profits.
C) An agreement by firms to charge high prices is illegal. The government can fine the firms and send their managers to jail.
D) Consumers may resent having to pay high prices and not buy from either of the firms.
C
You might also like to view...
Lowering a fixed exchange rate by a government is called a(n) __________ of that rate
A) devaluation B) revaluation C) appreciation D) depreciation
When the level of insurance premiums that someone pays is equal to the amount that an average person in that risk group would collect in insurance payments, the level of insurance is said to be:
a. risk-balanced. b. successful. c. actuarially fair. d. at the threshold of risk.
Suppose the total value of all assets in the Country A is $10 trillion. In 2020, the total value of all final services produced in Country A was $150 billion, the total value of all final goods produced in Country A was $350 billion, and the total value of all final goods and services produced by Country A's firms in other countries was $100 billion. In this situation, Country A's Gross Domestic Product for 2020 was
A. $510 billion. B. $600 billion. C. $500 billion. D. $10.5 trillion.
The increase in stock prices in 2009 and 2010 was
A. a consequence of the elimination of the threat of a wider global depression. B. totally irrational and unjustified by any fundamental determinants of stock values. C. largely due to the sharply increased uncertainty regarding the strategically-critical financial sector. D. the result of an elaborate conspiracy by greedy manipulators to ruin the Big Three automakers.