Is a cartel more likely to sustain in the presence of non-colluding firms? Why?
Is a cartel more likely to sustain in the presence of non-colluding firms?
Why?
Homework Answers
No, cartel is not likely to sustain in presence of non colluding firms as it is illegal for firms to collude because collusion shows anti competitive behaviour which results voilation of anti trust law. When a cartel at not inclusive of all things , Colluding firms sets a price which works as an umbrella with he members of non cartel. even in United states Cartels have provided evidence as of cartels were formal agreements of collusion .
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Is a cartel more likely to sustain in the presence of
non-colluding firms?
Why?
Why is it difficult for colluding firms to maintain a cartel? Select one: a. Because member...
Why is it difficult for colluding firms to maintain a cartel? Select one: a. Because member firms find the prospect of cheating too attractive to resist b. Because the large profits made by existing firms result in new firms entering the industry c. Because cartels always end up producing too little with the result that at least one member firm will find it profitable to raise its price and the o O d. Because cartels are illegal. ОО
When is a cartel least likely to be successful? when there is significant competition from non...
When is a cartel least likely to be successful? when there is significant competition from non members when there are not any strong antitrust laws when the expected gains from forming a cartel exceed the potential punishment when the cost of establishing and enforcing the cartel agreement are relatively low compared to the gains.
Why would unions be more likely to obtain higher wages from monopolist firms (the firms are...
Why would unions be more likely to obtain higher wages from monopolist firms (the firms are monopoly in the product market) than firms in a perfectly competitive product market?
Chapter 13 Vocabulary a. Non-price competition b. Cartel c. Prisoner’s dilemma d. Excess capacity e. Collusion...
Chapter 13 Vocabulary a. Non-price competition b. Cartel c. Prisoner’s dilemma d. Excess capacity e. Collusion f. Differentiated product g. Herfindahl index h. Duopoly i. Monopolistic competition j. Oligopoly ( ) 7. Five or fewer firms produce most of the output in an industry, or control a large share of the market. ( ) 5. Most type of retail stores, like J. Crew, fall into this market category. ( ) 8. This is a two-firm oligopoly. ( ) 1. In...
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Suppose that Airbus and Boeing decide to form a cartel. Is it likely that they both...
Suppose that Airbus and Boeing decide to form a cartel. Is it
likely that they both stick to an agreement where each of them
produces equal quantities in order to maximize total revenue? In
other words, does a formation of such a cartel constitute a Nash
equilibrium? Explain carefully (hint: try to figure out if there is
a profitable deviation for one of the firms while the other sticks
to the cartel agreement).
1. In the commercial aircraft business, Boeing...
Suppose the two firms form a cartel designed to generate monopoly level profits. Explain intuitiv...
Suppose the two firms form a cartel designed to generate
monopoly level profits. Explain intuitively why we might expect the
cartel to fail. Sentence form
In a non-collusive oligopoly if one firm increased its price what would the other firms likely...
In a non-collusive oligopoly if one firm increased its price what would the other firms likely do? What about a price decrease?
Consider a cartel, the Organization of the Rice Exporting Companies (OREC), which is a group of...
Consider a cartel, the Organization of the Rice Exporting
Companies (OREC), which is a group of rice-exporting countries.
Although OREC has eight members, let’s keep it simple and assume
there are only two: China and Vietnam. The figure below shows the
payoff matrix for the game.
Each country must choose how much rice to produce, either low
output or high output. Note that this payoff matrix
is not symmetric. At any outcome, China makes more money than
Vietnam because China...
3. There are two firms that compete according to Cournot competition. Firm 1 has a cost...
3. There are two firms that compete according to Cournot competition. Firm 1 has a cost function G(91) = 5.59+12. Firm 2 has a cost function C(q2) = 2.5q3 + 18. These firms cannot discriminate, so there is just one price that is determined by the aggregate demand. The inverse demand equation is P(Q) = 600 – 0 Where total supply Q-q1+92. (e) Use your best response equations to mathematically solve for the equilibrium quantities qi 9, Q". equilibrium price...
Why is it difficult for colluding firms to maintain a cartel? Select one: a. Because member firms find the prospect of cheating too attractive to resist b. Because the large profits made by existing firms result in new firms entering the industry c. Because cartels always end up producing too little with the result that at least one member firm will find it profitable to raise its price and the o O d. Because cartels are illegal. ОО
Suppose that Airbus and Boeing decide to form a cartel. Is it
likely that they both stick to an agreement where each of them
produces equal quantities in order to maximize total revenue? In
other words, does a formation of such a cartel constitute a Nash
equilibrium? Explain carefully (hint: try to figure out if there is
a profitable deviation for one of the firms while the other sticks
to the cartel agreement).
1. In the commercial aircraft business, Boeing...
Suppose the two firms form a cartel designed to generate
monopoly level profits. Explain intuitively why we might expect the
cartel to fail. Sentence form
Consider a cartel, the Organization of the Rice Exporting
Companies (OREC), which is a group of rice-exporting countries.
Although OREC has eight members, let’s keep it simple and assume
there are only two: China and Vietnam. The figure below shows the
payoff matrix for the game.
Each country must choose how much rice to produce, either low
output or high output. Note that this payoff matrix
is not symmetric. At any outcome, China makes more money than
Vietnam because China...
3. There are two firms that compete according to Cournot competition. Firm 1 has a cost function G(91) = 5.59+12. Firm 2 has a cost function C(q2) = 2.5q3 + 18. These firms cannot discriminate, so there is just one price that is determined by the aggregate demand. The inverse demand equation is P(Q) = 600 – 0 Where total supply Q-q1+92. (e) Use your best response equations to mathematically solve for the equilibrium quantities qi 9, Q". equilibrium price...
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