Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 10, Problem 7P
A
To determine
the reasons because of which some members of the OPEC may cheat on their cartel agreement.
(a) In case the less developed countries join as cartel members.
Concept Introduction:
A cartel is a group of firms that agree to coordinate their production and pricing decisions to reap
B
To determine
the reasons because of which some members of the OPEC may cheat on their cartel agreement.
(b) In case the members get doubled.
Concept Introduction:
A cartel is a group of firms that agree to coordinate their production and pricing decisions to reap monopoly profits.
C
To determine
the reasons because of which some members of the OPEC may cheat on their cartel agreement.
(c) In case the debts that are international grows up.
Concept Introduction:
A cartel is a group of firms that agree to coordinate their production and pricing decisions to reap monopoly profits.
D
To determine
the reasons because of which some members of the OPEC may cheat on their cartel agreement.
(d) In case the expectations of cheating members rise.
Concept Introduction:
A cartel is a group of firms that agree to coordinate their production and pricing decisions to reap monopoly profits.
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3. Breakdown of a cartel agreement
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Price
The graph below depicts the market demand curve faced by a hypothetical cartel operating in the US. Use
the graph to highlight the area that represents the profits earned by the cartel.
100
90
80
70
60
50
40
30
20
10
0
0
D
B
Profit
C
A
Marginal cost average cost
Market demand
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1000 2000 3000 4000 5000 6000 7000 8000 900010000
Quantity
If the US government decides to break up the cartel. Which
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The Sherman Antitrust Act
The First Amendment
The Dodd Frank Act
The Glass Stegall Act
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