What is a cartel? Can cartels generate long-term profits without the existence of barriers to entry?
What will be an ideal response?
A cartel is an association of producers in an industry that agree to set common prices and output quotas to prevent competition. If they successfully earn profits, new firms will enter, so barriers to entry are still needed.
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The equilibrium price in a market occurs where the:
A) market demand and the firms' average cost curves intersect. B) market supply and the firms' average cost curves intersect. C) market demand and the market supply curves intersect. D) market supply and the firms' revenue curves intersect.
Balanced growth occurs when
A) the economy is in steady state. B) the growth rates for the capital-labor ratio and real GDP per worker are the same. C) total factor productivity and capital accumulation each account for the same amount of growth in labor productivity. D) nations converge to the same level of real GDP per worker from equal increases in total factor productivity.