When is a collusive agreement between two firms likely to break down?
What will be an ideal response?
A collusive agreement might break down if either firm "cheats" and charges a lower price. If the other firm fails to detect it, the firm that lowers its price may be able to capture the entire market.
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One of the primary reasons that Mexico has had trouble attracting foreign investment and has therefore experienced relatively low rates of economic growth is
A) poor public education and health. B) the failure to enforce the rule of law. C) low rates of saving and investment. D) persistent wars between Mexico and its neighboring countries.
Government intervention in agricultural markets in the U.S. began
A) during the Korean War. B) during World War II to ensure that enough food was available for domestic consumption. C) after World War I in order to assist farmers to adjust from a war-time economy to a peace-time economy. D) during the Great Depression.