The lime drinks industry and the cola drinks industry are both operating as oligopolies. The two firms in the lime drinks industry agree to form a cartel, while the three firms in the cola drinks industry are unable to come to an agreement. In the given scenario, which of the following statements is true?
a. The producers of lime drinks will share monopoly profits, while the producers of cola drinks will have profit levels typical of competition.
b. The producers of lime drinks will have the profit levels of monopolistic competitors, while the producers of cola drinks will eventually have zero profits.
c. The producers of lime drinks will eventually have zero profits, while the producers of cola drinks have the profit levels of perfect competitors.
d. The producers of lime drinks will have profit levels like perfect competitors, while the producers of cola drinks will share monopoly profits.
a
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If a cut in prices decreases total revenue in the short run, what will it do to total revenue in the long run? a. It will decrease total revenue in the long run
b. It will increase total revenue in the long run. c. It will leave total revenue unchanged in the long run. d. Any of the above results are possible in the long run.
The production possibilities curve represents
A) the maximum amount of labor and capital available to society. B) the combinations of goods and services among which consumers are indifferent. C) the maximum combination of goods and services that can be produced with fixed resources and technology, given efficient use of the resources. D) the maximum rate of growth of capital and labor in a country.