Wister and Narsum produce household appliances. Which of the following actions could be considered collusive?
a. Wister sets a price that maximizes its profits.
b. Narsum becomes the price leader in the industry by increasing output.
c. Wister has a strategy to react to any pricing changes made by Narsum.
d. Narsum agrees to divide mutual profits with Wister.
d. Narsum agrees to divide mutual profits with Wister.
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Explain how the value of marginal cost affects the values of average variable cost and average total cost and what this means for the relationship between the marginal cost curve and the average variable and total cost curves
What will be an ideal response?
A multi-plant firm has three plants and, at its current production levels, the marginal cost of production at each of the three plants is $2.00. If the firm is perfectly competitive and the market price of its product is $5, which of the following is true?
A) The firm should exactly triple output in each of the plants to maximize profit. B) The firm is not producing the profit-maximizing total output. C) The firm is producing the profit-maximizing total output. D) The firm should increase output at each of the plants to maximize profit.
The interest rate the Fed charges for secondary credit is:
A. above the primary discount rate. B. equal to the primary discount rate. C. below the market federal funds rate. D. below the primary discount rate.
One can determine the amount of any level of total income that is consumed by:
A. multiplying total income by the slope of the consumption schedule. B. multiplying total income by the APC. C. subtracting the MPS from total income. D. multiplying total income by the MPC.