Which of the following would make it easier to maintain an effective collusive agreement in a cartel?
A) An increase in the number of potential entrants into the industry.
B) A decrease in the elasticity of demand for the cartel's product.
C) An increase in the number of substitutes for the product produced by the cartel.
D) A new method of pricing that makes it more difficult for each firm to monitor the prices that the other firms in the cartel are charging.
B
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Suppose the absolute value of the price elasticity of demand for meals at Fortune Buffet House is ?. What happens to sales revenue if the restaurant increases its price by 5 percent?
A) Sales revenue falls by 100 percent. B) Sales revenue falls by less than 5 percent. C) Sales revenue remains unchanged. D) It cannot be determined without information on prices.
Backloaded compensation makes the wage profile increase at a decreasing rate
Indicate whether the statement is true or false
What are the assumptions of the kinked demand curve model? What is its main conclusion about oligopoly behavior?
When the price of a good falls, marginal utility per dollar spent on that good ________, prompting consumers to purchase ________ of that good.
A. rises; less B. rises; more C. falls; less D. falls; more