If the absolute price elasticity of demand of a good is 1.46, then the total revenues will increase if its market price
A) increases.
B) decreases.
C) stays the same.
D) changes, but we can't tell without more information if the price increases or decreases.
B
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Collusion makes firms better off because if they act as a single entity (a cartel) they can reduce output and increase their prices and profits. But some cartels have failed and others are unstable
Which of the following is a reason why cartels often break down? A) Most cartels do not have a dominant strategy. B) Each member of a cartel has an incentive to "cheat" on the collusive agreement by producing more than its share when everyone else sticks with the collusive agreement. C) Members of a cartel may resent having to share their profits equally. D) When a cartel is profitable the amount of competition it faces increases.
What is the shape of average cost curve? Provide the reason for that particular shape.
What will be an ideal response?