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Author Question: A monopolistically competitive firm is like a perfectly competitive firm insofar as both A) have ... (Read 55 times)

ap345

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on: Jun 29, 2018
A monopolistically competitive firm is like a perfectly competitive firm insofar as both
 
  A) have negatively sloping demand curves.
  B) can make zero economic profit in the long run.
  C) have horizontal MR curves.
  D) are protected by high barriers to entry.

Question 2

In the United States, why are cartels among firms usually kept secret?
 
  What will be an ideal response?


deja

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Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

Cartels are typically kept secret because they are illegal. In the United States and many other countries, it is illegal for firms to collude to form a cartel. It is illegal because firms collude in order to restrict output, raise prices, and capture consumer surplus so that they increase their economic profit.


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