What makes it extremely difficult for cartels to function effectively without government assistance?
A) Cartel members cannot agree among themselves on the optimum price because all have different costs.
B) High prices encourage cartel members to offer discounts, and they attract new entrants to the industry.
C) Marginal cost will not equal marginal revenue except at output levels beyond the cartel's capacity.
D) Public interest considerations usually require an output greater than the cartel's net revenue maximizing output.
E) The hostility of the public to price exploitation makes it difficult for the cartel to defend itself against the consequences of popular hostility.
B
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Which of the following is TRUE?
a. Maximizing division profits will always lead to maximizing company profit b. Maximizing division profits will always lead to minimizing company profit c. Maximizing division profits can sometimes lead to reducing company-wide profit d. Maximizing division profits has no effect on company-wide profits
A point on the production possibilities curve represents a combination of goods that is
a. inefficient. b. efficient. c. unattainable. d. attainable.