In which of the following cartels is total cartel profit likely to be the highest?
A) a cartel made up of firms of various sizes each producing the same quantity of a differentiated product
B) a cartel made up of identical firms each producing the same quantity of a homogeneous product
C) a cartel made up of equal sized firms each producing different quantities of a differentiated product
D) a cartel made up of firms of various sizes each producing different quantities of a homogeneous product
B
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Indifference curves on the same indifference map can have different shapes
Indicate whether the statement is true or false
If monopolistically competitive firms are earning economic profits, then in the transition to the long-run equilibrium: a. more firms will enter the industry
b. prices will tend to fall. c. each firm will produce a smaller quantity of output. d. all of the above will occur.