Author Question: Refer to the scenario above. The winner of this auction will earn a surplus of ________ if he/she ... (Read 93 times)

yoroshambo · **on:** Jun 29, 2018

Refer to the scenario above. The winner of this auction will earn a surplus of ________ if he/she follows his/her dominant strategy.

A) 100
B) 50
C) 400
D) 200

Question 2

What determines the success of a cartel?

What will be an ideal response?

ApricotDream · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

There are two important considerations that determine how successful a collusive arrangement is: the detection and punishment of cheaters and the long-term value of the market in which the colluding firms operate.