When firms engage in tacit collusion, they:
a. meet periodically to establish production quotas.
b. meet periodically to establish a monopoly price.
c. limit production in a way that enhances industry profits.
d. compete on price by undercutting each other.
Ans: c. limit production in a way that enhances industry profits.
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Refer to the information above. In which period does gross investment reach its peak?
A) 1 B) 2 C) 3 D) 4 E) 5
If demand increases and supply decreases
A) the market clearing price definitely will increase, and the equilibrium quantity definitely will increase. B) the market clearing price definitely will increase, and the equilibrium quantity definitely will decrease. C) the market clearing price definitely will increase, but the change in the equilibrium quantity cannot be determined without more information. D) the equilibrium quantity definitely will decrease, but the change in the market clearing price cannot be determined without more information.