Which of the following contracts contain vertical restrictions that limit the transacting parties' choices but create economic value?
a. An agreement between firms to jointly invest in research and development.
b. A franchise contract specifying exclusive territory of operation.
c. A contract amongst competitive firms on an uniform pricing strategy.
d. A collusion between two oligopoly firms specifying individual production.
B
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To explain the existence of excess capacity, Keynes argued that
A) prices and wages are flexible, and eventually markets would go back to equilibrium. B) the long run average cost curve should not occur at the full employment level. C) the aggregate demand curve can be manipulated by advertising. D) prices and wages are inflexible in the downward direction.
Education confers positive externalities because
a. some education is done outside the market (i.e., in public schools) b. curricula are regulated by the government, even in private schools c. an educated person consuming education gains many benefits he or she did not expect when the process started d. an educated person who has consumed education usually behaves in a way that benefits others e. education gives benefits to individuals in excess of the costs they pay to get it
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. The slope of Country A's production possibilities frontier is _______, and Country B's is __________.
A. 5; 3
B. 30; 3
C. 1/5; 1/3
D. 1/5; 1/3
If ATC is $100, AVC is $90 and MC is $80, then
A. ATC is rising and AVC is rising. B. ATC is falling and AVC is falling. C. ATC is rising and AVC is falling. D. ATC is falling and AVC is rising.