« previous next »

Author Question: If firms in duopoly collude and operate as a monopoly, the industry produces more output compared to ... (Read 84 times)

lindiwe

  • Hero Member
  • *****
  • Posts: 577
on: Jun 29, 2018
If firms in duopoly collude and operate as a monopoly, the industry produces more output compared to the Nash equilibrium. True or false? Explain.
 
  What will be an ideal response?

Question 2

Because of a decrease in labor costs, a monopoly finds that its marginal cost and average total cost have decreased. The monopoly ________ its price and ________ its quantity.
 
  A) raises; increases
  B) raises; decreases
  C) lowers; increases
  D) lowers; decreases


jackie

  • Sr. Member
  • ****
  • Posts: 324
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is false. In the Nash equilibrium, both firms cheat and output is the same as in perfect competition. If the firms operate as a monopoly, the industry's profit-maximizing level of output is below the competitive level.

Answer to Question 2

C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Famous people who died from poisoning or drug overdose include, Adolf Hitler, Socrates, Juan Ponce de Leon, Marilyn Monroe, Judy Garland, and John Belushi.

Did you know?

In the United States, an estimated 50 million unnecessary antibiotics are prescribed for viral respiratory infections.

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

Did you know?

Before a vaccine is licensed in the USA, the Food and Drug Administration (FDA) reviews it for safety and effectiveness. The CDC then reviews all studies again, as well as the American Academy of Pediatrics and the American Academy of Family Physicians. Every lot of vaccine is tested before administration to the public, and the FDA regularly inspects vaccine manufacturers' facilities.

Did you know?

A headache when you wake up in the morning is indicative of sinusitis. Other symptoms of sinusitis can include fever, weakness, tiredness, a cough that may be more severe at night, and a runny nose or nasal congestion.

Faulty outlooping produces F?, an F plasmid that contains chromosomal DNA Faulty outlooping produces F?, an F plasmid that contains chromosomal DNA
Lucy’s Body Weight Proportions Compared to a Bonobo Lucy’s Body Weight Proportions Compared to a Bonobo
Active Compared with Passive Voice Active Compared with Passive Voice
Income of Adult Children Compared With That of Their Parents Income of Adult Children Compared With That of Their Parents
The output on this alternator is printed on a label. The output on this alternator is printed on a label.
The major cortical input and output pathways of the posterior parietal association cortex. Shown are ... The major cortical input and output pathways of the posterior parietal association cortex. Shown are ...
Video: Major Elements in Biological Molecules: Proteins

For a complete list of videos, visit our video library