Which of the following situations defines a cartel?
a. Market forces that discourage or prevent potential competitors from entering the market
b. A regulated monopoly with intellectual property protections
c. A group of firms with a formal agreement to collude on price and output
d. A firm that uses sharp but temporary price cuts to discourage new competition
c. A group of firms with a formal agreement to collude on price and output
A cartel is a group of firms that have a formal agreement to collude to produce at the monopoly output and sell at the monopoly price. If a group of U.S. companies signed such a contract, however, it would be illegal.
You might also like to view...
Commitments to make or receive payments in the future are made easier by money's function as a _____
a. unit of account b. store of value c. medium of exchange d. form of barter e. commodity
To gain market share
A) a firm needs to be in a competitive market. B) a firm needs to limit substitutes. C) a firm needs to produce a commodity. D) a firm needs to be a substitute for other products
When the economy enters a prosperity phase, unemployment insurance payments
a. fall, causing incomes and spending to fall more slowly than real GDP b. fall, causing incomes and spending to fall more rapidly than real GDP c. rise, causing incomes and spending to rise more slowly than real GDP d. rise, causing incomes and spending to rise more rapidly e. fall, causing incomes and spending to fall at the same rate as real GDP
Explain why rational expectations theorists do not support government intervention to alleviate unemployment. Explain their views on the effectiveness of fiscal policy and monetary policy.
What will be an ideal response?