What happens to the profit-maximizing cartel price and quantity if the marginal cost of production declines?
A) The sellers are no longer price takers, so the change in marginal cost has no impact on the cartel outcome.
B) If demand is downward sloping, the optimal cartel price should decline and the market quantity should increase.
C) The sellers retain the same pricing strategy and capture higher per-unit profits.
D) The cartel price increases and market quantity declines.
B
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Average cost is the cost of producing the next unit.
Answer the following statement true (T) or false (F)
An industrial union can obtain a wage higher than the competitive level
a. without any change in total employment b. at the cost of a reduction in total employment c. and achieve higher total employment as well d. and achieve the same or higher total employment e. thus increasing the quantity of labor demanded
Government farm subsidies in the U.S. reflect
a. the lack of urban population political clout b. the adverse market consequences that could undermine farm stability and the national economy c. the need for farmers to supply agricultural products in the world market d. the U.S. Constitution that mandates farm subsidies e. the concern that American food supply is unreliable
The price level in the economy is a composite measure reflecting the:
a. rate of change in average prices for the wide range of services produced and consumed in one of the sectors of the economy relative to the price level expected the next year. b. average price of the wide range of goods and services produced and consumed in the economy relative to the price level in a base year. c. rate of change in the price of inputs used to produce the wide range of goods and services in the overall economy relative to the price level in a base year. d. government's cost of procuring resources to produce public goods and services relative to the price level in a base year.