Policing members' output restrictions and preventing new entrants. b. Agreeing on the price to be set and preventing new entrants. c. Coordinating marketing policies and policing members' quotas. d. Agreeing on the price to be set and coordinating marketing policies. e. Policing members' prices and restricting

Policing members' output restrictions and preventing new entrants. b. Agreeing on the price to be set and preventing new entrants. c. Coordinating marketing policies and policing members' quotas. d. Agreeing on the price to be set and coordinating marketing policies. e. Policing members' prices and restricting

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter10: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 13SQ

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If south africa increased its production by 1,000 diamonds while russia stuck to the cartel agreement, south africa's profit would Increase or decrease . Why are cartel agreement often not successful? choose on below: a. one party has an incentive to cheat to make more profit. b. different firms experience different cost c. all parties would make more money if everyone increased production
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Match the concept with the appropriate description. A tacit collusion situation in which firms behave "as if" they would be in some sort of agreement that seems to coordinate their behaviour. A collusion agreement that requires firms to have some sort of communication in which they coordinate their behaviour. Organization of Petroleum Exporting countries is an example of this type of market behaviour. 1. Explicit cartel 2. Implicit cartel 3. Horizontal merger OC
Suppose that two identical firms produce widgets and that they are the only firms in the market. The average and marginal cost is €6 for each firm. Price is determined by the following demand curve: P = 30 – Q where Q = Q1 + Q2. Suppose the two firms combine together and form a cartel. The output produced by each firm in the cartel is (assuming that they split the cartel output equally between them) A. 6 B. 12 C. 8 D. 4 Two identical firms compete in a market to sell a homogenous good with the following inverse demand function: P = 600 – 3Q. Each firm produces at a constant marginal cost of €300 and there are no fixed costs. The price that each firm in the Cournot equilibrium will charge is A. 400 B. 500 C. 300 D. 450
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The table shows the demand schedule for a particular product. Quantity Price 0 100 300 90 600 80 900 70 1200 60 1500 50 1800 40 2100 30 2400 20 2700 10 3000 0 Suppose the market for this product is served by two firms who have formed a cartel and are colluding to set the price and quantity in this market. If the marginal cost to produce this product is constant at $40 per unit, then what price will the cartel set in this market? a. $40 b. $50 c. $60 d. $70 e. $80
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Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Quantity Demanded (Units) 0 5 10 15 20 25 Price (Dollars per unit) 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 30 35 40 45 50 55 60 65 70 Total Revenue (Dollars) 0 65 120 165 200 225 240 245 240 225 200 165 120 65 0 Total Cost (Dollars) 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 Refer to the table above and explain: A). If ABC and MNO operate to jointly maximize profits, then what is the price? $9 B). If ABC and MNO operate to jointly maximize profits, then what quantity is sold? 25 I Profit (Dollars) 0 45 80 105 120 125 120 105 80 45 0 -55 -120 -195 -280 C). If ABC and MNO operate to jointly maximize profits and agree to share the profit equally, then how much profit will each of them earn? $62.5 D). ABC and MNO agree to maximize joint profits. However, while ABC produces the agreed-upon amount,…
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