Assume that the supply curve is horizontal because marginal cost is constant at $10. John, Robert, and Jimmy each value one compact disc at $20 but only Jimmy and John value a second compact disc (Jimmy at $5 and John at $15). If a social planner dictates that two compact discs be produced and distributed to John, Robert, and Jimmy, then even if the compact discs are allocated based on demand, this market will lose out on $___ of value.

A problem with the socialization argument is that _____

a. the organization of public schools often lends itself to segregation b. it is unfair c. students need to learn to be good citizens d. public schools are open to everyone

When the market demand curve is relatively inelastic

A) it is unrealistic for a cartel to form because profits will be lower. B) penalties for forming an illegal cartel will be relatively low. C) the lower the price the cartel sets, the greater the benefits to the cartel. D) the higher the price the cartel sets, the greater the benefits to the cartel.