Lower under such an agreement in long-run equilibrium

Assignment Help Business Economics

Reference no: EM131236829

Even if firms in a monopolistically competitive market collude successfully and fix price, economic profit will still be competed away if there is unrestricted entry. Explain. Will price be higher or lower under such an agreement in long-run equilibrium than would be the case if firms didn’t collude? Explain.

Reference no: EM131236829

Questions Cloud

Inverse demand equation for the commodity : A firm faces the following inverse demand equation for the commodity it produces: P = 100 – Q where P represents the price/unit of the commodity it produces and Q represents the level of output produced. The cost structure of this firm is summarized ..

Opportunity cost of the decisions that were actually made : The U.S. is one of the worlds wealthiest countries think of a recent case in which the decision of the U.S government were severely constrained by scarcity. Describe the trade off that were involved. What were the opportunity cost of the decisions th..

Demand equation for good : An MBA student has proposed the following demand equation for good Y. QdY = a + b PY + c M where: QdY = quantity demanded of good Y in millions of tons per year PY = Price of good Y in dollars per ton M = Average consumer income in thousands of dolla..

Antitrust authorities at the federal trade commission : Antitrust authorities at the Federal Trade Commission are reviewing your company’s recent merger with a rival firm. The FTC is concerned that the merger of the two rival firms in the same market will increase market power. A hearing is scheduled for ..

Lower under such an agreement in long-run equilibrium : Even if firms in a monopolistically competitive market collude successfully and fix price, economic profit will still be competed away if there is unrestricted entry. Explain. Will price be higher or lower under such an agreement in long-run equilibr..

Distinguishing between the short-run and the long-run : Insurance agents receive a commission on the policies they sell. Many states regulate the rates that can be charged for insurance. Would higher or lower rates increase the incomes of agents? Explain, distinguishing between the short-run and the long-..

Consider the production possibilities curve : Consider the production possibilities curve for a nation that can produce either consumption or investment goods. Describe and show the impact of each of the following using the PPF diagram.

The owners would be faced with what challenges : In a 100% socialist structure, the owners would be faced with what challenges? They lose the opportunity to make and hold onto extreme profits. They assume all the financial risk if their businesses fail. They no longer can change careers because the..

Price elasticity of demand for good : A price elasticity of demand for Good X equal to -.85 implies. We also assume in macroeconomics that total expenditure is equal to total output Y=C+I+G. Given the following data, derive a formula that relates Y as a product of r (hint your result sho..

User Account

All Pages