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Question
Being part of a cartel is generally good for a firm because it can reduce output while increasing prices and profits. Yet most cartels have failed. Why is this the case?
a. Cartels lack a dominant strategy.
b. As the cartel becomes more profitable, competition increases.
c. Cartel members dislike having to equally share profits.
d. Each member of the cartel faces an incentive to cheat and produce more, while all of the other members honor the agreement.
e. Cartel members eventually go out of business.
Answer
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Related questions
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b. relatively unresponsive to a change in price.
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e. completely responsive to a change in price.
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Price gouging laws will usually result in ________ the product in the distressed market.
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c. government setting up an agency to regulate supply of
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The economic entity most likely to engage in price gouging is
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Q:
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What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
b. He or she will substitute toward the product.
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d. When a binding price ceiling exists, he or she will be willing to pay a lower price.
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Q:
What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
c. A shortage will continue to exist and will grow larger over time.
d. A shortage will continue to exist and will grow smaller over time.
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Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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b. Prices in the legal market in the community with a binding price ceiling will fall.
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c. The binding price ceiling will increase the likelihood that consumers will obtain needed drugs on the black market.
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c. The price and the quantity sold in the community without a nonbinding price ceiling will be the same as the price and quantity in the community with a nonbinding price ceiling.
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Q:
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a. Demand for jelly will increase along with the price.
b. Demand for jelly will decrease along with the price.
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e. The supply of jelly will decrease and the price will increase.
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Q:
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Q:
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