Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

A cartel is likely to last longer if

A) more new firms enter the market. B) the profits of participating members are relatively stable. C) market prices vary more over time. D) there are more firms in the industry.

The Fab Five, a cartel of five firms, sells a homogenous product. The Oct-Pool cartel is composed of eight firms that can differentiate their products. In the given scenario, which of the following statements is true?

a. The firms of both cartels are likely to cheat on their cartel agreements. b. The firms of both cartels are unlikely to cheat on their cartel agreements. c. The Fab Five cartel firms are likely to cheat on their cartel agreement, while the Oct-Pool cartel firms are unlikely to cheat on their cartel agreement. d. The Oct-Pool cartel firms are likely to cheat on their cartel agreement, while the Fab Five cartel firms are unlikely to cheat on their cartel agreement.