A Number of Firms Agreeing Together to Restrict Output and Thereby

question 46

Multiple Choice

A number of firms agreeing together to restrict output and thereby raise prices is known as

• A) a natural monopoly.
• B) a monopoly.
• C) a barrier to entry.
• D) a cartel.
• E) an oligopoly.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability and the ability to raise capital through stock.

Stockholders

Individuals or entities that own shares in a corporation, giving them ownership interest.

Limited Risk

Exposure to a relatively small possibility of loss or less severe consequences in an investment or business activity.

Assets

Resources owned by a business or individual that have economic value and can provide future benefits.