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Author Question: Why do most collusive agreements have difficulty surviving? What will be an ideal ... (Read 77 times)

EAugust

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on: Jun 29, 2018
Why do most collusive agreements have difficulty surviving?
 
  What will be an ideal response?

Question 2

If the desired reserve ratio rises, the money multiplier
 
  A) decreases.
  B) increases.
  C) stays the same.
  D) probably changes but more information is needed to determine if it increases or decreases.


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brittanywood

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

Most collusive agreements have difficulty surviving because each firm individually can increase its profits by lowering its price and increasing its output. Because of this fact, the incentive to cheat on the agreement is great for all firms.

Answer to Question 2

A


EAugust

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

nathang24

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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