Suppose that the firms in an oligopolistic industry successfully collude. What will be the outcome? Explain
What will be an ideal response?
If a group of oligopolistic firms collude when setting price and output, the result would be exactly the same as if a monopolist controlled the industry. To maximize profit, the firms would produce where industry marginal revenue is equal to marginal cost.
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The assumption that the magnitude of the slope of an indifference curve decreases moving to the right along the indifference curve is known as the assumption of
A) the price effect. B) a diminishing marginal rate of substitution. C) an increasing marginal rate of substitution. D) an indifference curve effect.
Your U.S.-based company is selling parts to a company in Chile and the company will pay you 9.8 million pesos in 3 months. The current exchange rate is 490 pesos/US$. If the exchange rate at the time of payment is 510 pesos/US$
A) you earn additional profit. B) the Chilean company will end up paying more for the goods. C) the Chilean company will end up paying less for the goods. D) you earn less profit.