A highly profitable cartel arrangement among sellers contains the seeds of its own disintegration because
A) a monopoly arrangement is more unstable than an oligopoly arrangement.
B) a price maintained above each cartel member's marginal cost is an incentive to offer secret price reductions to attract additional business.
C) monopoly agreements will, in the long run, reduce net revenue to zero.
D) net revenue for the cartel as a whole could be increased by producing at the level where marginal revenue equals marginal cost for each cartel member.
E) the cartel members will have a strong incentive to reduce quality.
B
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When the "real" GDP falls, the rate of unemployment generally
A) equals the natural rate. B) decreases. C) increases. D) stays constant.
As a result of a successful attempt by government to cut the economic pie into more equal slices,
a. the pie gets larger, and there will be more pie overall. b. the pie gets smaller, and there will be less pie overall. c. it increases the reward for working hard, resulting in people producing more goods and services. d. those who earn more income pay less in taxes.