Which set of actions will help three oligopolistic firms to achieve joint profit maximization?
a. They decide not to cooperate, and each pursues its individual self-interest.
b. They decide to collude and to trust each other not to defect from the agreement.
c. They sign a cartel agreement, and then each firm cheats on it.
d. They choose a dominant firm, and then they take turns being the price leader.
b. They decide to collude and to trust each other not to defect from the agreement.
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When inflation is much higher than expected, which of the following is true?
a. Nominal incomes are lower than expected. b. Real interest rates are higher than expected. c. Income is redistributed from those whose expenditures are fixed toward those who receive a fixed income. d. Nominal interest rates are lower than expected. e. Real interest rates are lower than expected.