Explain the effects of low price-guarantee on the price

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Reference no: EM133202008

Assignment:

1. Explain the effects of low price-guarantee on the price.

2. Give reasons, when average cost increases as the total output increases for an increasing cost industry.

1408_Price-fixing arrangement.jpg

Figure shows the market for a successful price-fixing arrangement (cartel) between two identical firms. When the two firms act like one and charge the same price.

a. What will be the market price?

b. How much each firm will produce and sell quantity?

Reference no: EM133202008

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