If there is a collusive agreement in a duopoly to maximize profit, then the price will
A) equal the marginal cost of production.
B) equal the average total cost of production.
C) be the same as the price set by a monopoly.
D) be the same as the price set by a competitive industry.
C
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Refer to the diagrams and assumptions. If all the workers who lose their jobs in the union sector because of a W n to W u union wage increase are reemployed in nonunion sector 2, output in that sector will:
These two graphs show two sectors of the labor market for a particular kind of
labor. Relevant product markets are competitive. The two labor demand curves are identical and initially the quantities of labor employed in the two sectors are L 1 and L 1 and the wage rate in each sector is W n
A. decrease by F + G.
B. increase by F + G.
C. increase by E + F.
D. increase by E.
Within a market economy, some industries may be declining while other industries may be expanding. This indicates that:
A. producers are not maximizing profits. B. productive resources are being reallocated. C. factors of production are scarce. D. incomes are declining.