What price would the cartel charge

Assignment Help Microeconomics
Reference no: EM131131116

Oligopolies may produce the same good or a differentiated product. The key distinction between oligopoly and other market structures is that there is a strategic interdependence between the firms in the market. Usually there are only a few firms in an oligopoly, but sometimes there are many, with a few very large ones that can exert some control over the market price.

a. The firms in an oligopoly would find it advantageous to form a cartel.

i. What is a cartel?
ii. What price would the cartel charge?
iii. That is, would they charge and price closer to what a monopolist would charge, or closer to the price that would prevail in a competitive market? Why? Briefly explain your answer.

b. Cartels are difficult to form and maintain.

i. Why is this?
ii. Even if they are legal (they are not in the U.S.), what would make it difficult for the firms to cooperate?
iii. Under what circumstances is the cartel more likely to be successful? Briefly explain your answer and give at least two difficulties.

c. Briefly describe at least one strategy a firm could use to encourage cooperation among the other firm(s) in their cartel.
d. Can oligopolies be efficient? Why or why not?

Reference no: EM131131116

Questions Cloud

How the elements or techniques illustrate the theme : Select three literary elements/techniques in the story and describe them. Explain how the elements/techniques illustrate the theme and conflict expressed in the story
Build the new high school in the existing park : The county manager is interested in finding out how each district and household by occupation responded to the survey. Were there any differences in questionnaire response between district and occupation? Finally, the county manager seeks to see ..
What is the most natural explanation for the growth in u.s. : The rest of the world was growing rapidly during this period. Based on this information, what is the most natural explanation for the growth in U.S. exports? (Related to Application 4 on page 242.)
Letters memos and emails should have one main topic : Do you agree/disagree with the idea that letters, memos and emails should have one main topic when they are work-related?
What price would the cartel charge : What price would the cartel charge? That is, would they charge and price closer to what a monopolist would charge, or closer to the price that would prevail in a competitive market? Why? Briefly explain your answer.
What benefit of recording productive and nonproductive time : How are costs tied to staffing? What is the difference between the annualized method and the scheduled-position method? Why annualize staffing? What is the benefit of recording productive and nonproductive time, if anything?
Summary of the article : Write 150 words summary of the article is requested without any subjective response to the article
What does accountability mean to you as a soldier : Write two page paper:- What does accountability mean to you as a soldier?- What is perception to you as a soldier?
Review the ncu template phd degree cp : First, review the NCU Template PhD Degree CP 2013 (below). While qualitative or quantitative design have many similarities, there are some important differences in the way each should be treated.

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd