Answer the following statement(s) true (T) or false (F)
1. Social welfare consequences are ambiguous when two or more manufacturers merge to take advantage of economies of scale.
2. When a monopoly supplier acquires a monopoly manufacturer, the vertical merger intensifies the supplier's use of monopoly power over the manufacturer.
3. A buy-out is more likely to delay a rival's reemergence than is predatory pricing.
4. Economic analysis suggests that resale price maintenance is primarily used by manufacturers to keep prices artificially high.
5. A firm has the incentive to cheat on a cartel agreement only when it fears that other cartel members will also cheat.
1. True
2. False
3. True
4. False
5. False
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International trade
A. raises the standard of living in all trading countries. B. lowers the standard of living in all trading countries. C. leaves the standard of living unchanged. D. raises the standard of living for importing countries and lowers it for exporting countries.
Which of the following statements is false?
A. One of the basic principles capitalism is based on is to "trust no one." B. To have real competition in a market economy no one business should be able to have any influence over price. C. A basic trade-off exists between the goals of equity and efficiency for a society. D. The forces of supply and demand will NOT automatically lead to an equitable distribution of income.