5. Suppose that the major television producers collude and form a television car

Question

5. Suppose that the major television producers collude and form a television cartel. Cartels are typically short-lived and subject to cheating because: A) the U.S. Justice Department will punish any cartel agreement before the cartel has a chance to operate. B) barriers to entry exist and will keep other firms from entering. C) product differentiation allows firms to cheat. D) a firm can increase its profits by expanding output and/or lowering its price 6. Suppose a firm is considering whether to advertise. The intended ef fect of advertising is to: A) move the market more towards the efficiency of monopoly. B) increase demand and perhaps achieve economies of scale. C) reduce brand loyalty by making demand more elastic. D) shift the supply curve to the right. E) none of the above

Explanation / Answer

Answer.)

Q5.) D.) a firm can its profits by expanding output and/or lowering its price

Cartels are typically short-lived because coordination problems often lead to cheating. Self-interest often conflicts with cooperation and it is difficult to enforce agreements reached by cartels.

Q6.) B.) Increase dmand and perhaps achieve economies of scale.

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.