When oligopolistic firms in an industry form a cartel, then it is most likely that
A) both industry output and prices will increase.
B) both industry output and prices will decrease.
C) industry output will increase while prices will decrease.
D) industry output will decrease while prices will increase.
Answer: D) industry output will decrease while prices will increase.
You might also like to view...
If the required reserve ratio is 10 percent, $1,000 cash deposited into a checkable deposit account will generate, assuming willing borrowers, an increase in the money supply of:
a. $900. b. $1,100. c. $9,000. d. $10,000. e. $11,000.
One way to allocate 1,000 (stadium capacity) football tickets priced at $20 to 2,000 would-be buyers is to
a. put the tickets on sale for half price b. increase market efficiency c. make the tickets available to more people at the low price d. use a price ceiling to ensure that the market will remain in equilibrium e. implement a ration coupon system