Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix above gives the economic profit that each firm can make
If Felix cheats on the agreement but Oscar complies, Felix makes an economic profit of ________ and Oscar makes an economic profit of ________. A) $10 million; $10 million
B) $1 million; $1 million
C) -$2 million; $12 million
D) $12 million; -$2 million
D
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Reasons that the recession of 2008-2009 did not become a depression include:
i. The Fed bailed out troubled financial institutions. ii. The government aggressively balanced its budget. iii. The government increased its expenditures, which increased aggregate demand. A) i only B) ii only C) iii only D) i and iii E) i and ii
Which of the following is NOT true about the $3 per pizza tax illustrated in the above figure?
A) It decreases consumer surplus by $90 thousand. B) It decreases producer surplus by $45 thousand. C) It creates a deadweight loss of $135 thousand. D) None of the above because they are all true.