Are the owners of taxicabs in New York City earning large profits because the city severely restricts the number of licenses?
A) No, because the city also regulates fares.
B) No, because the cost of owning a license absorbs the potential profit.
C) Yes, because the number of licenses has not been increased for 50 years.
D) Yes, because if they were not the number of taxicabs would decline and profits would rise.
E) We cannot tell because profit arises from uncertainty.
B
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The rules of strict constitutionality apply even during times of war in the U.S
Indicate whether the statement is true or false
Which of the following statements is always true with respect to oligopolists?
a. They react slowly to actions taken by other firms b. They lower prices together c. They raise prices together d. They know with certainty what they other firms will do e. They take into consideration how other firms might react.