The two tendencies of a firm in a cartel are the incentive to:
A. cheat to maximize joint profits and the incentive to raise prices.
B. cheat and avoid collusion and the incentive to raise price to maximize the firm's share of profits.
C. increase output in order to minimize per-unit cost and the incentive to reduce price in order to maximize joint profit.
D. cooperate to maximize joint profits and to cheat on the agreement in order to increase the firm's share of the profit.
Answer: D
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Suppose that the equilibrium wage in the low-skilled labor market is $9.25. Further, suppose the federal government raises the minimum wage to $9.00 an hour from its present level of $8.15
The government's action of increasing the minimum wage will result in A) a decrease in unemployment. B) an increase in unemployment. C) a shortage of low-skilled labor. D) neither a shortage nor a surplus of labor in the low-skilled labor market.
A firm can find a competitive advantage
A) by differentiating its product. B) by having a barrier to entry. C) through its organizational structure. D) all of these choices.