Why do firms collude to become a cartel? Because it allows them to
a. develop innovations without the threat of competition within the industry
b. compete in order to increase market share
c. act like a monopoly
d. diversify their markets without fear of losing market share
e. increase their own individual concentration ratio
C
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Which of the following does NOT follow from the theory of efficient markets
A. no one consistently outperforms the market B. short-run stock price changes are unpredictable C. careful stock research will increase investment returns D. stock prices incorporate all available information
If the price of corn chips increases from $2.00 per bag to $3.00 per bag and the quantity demanded goes down from 100 million bags per week to 50 million bags per week, the absolute value of price elasticity of demand in that price range is
A) 0.50. B) 1.67. C) 0.93. D) 2.33.