Three Firms Agree to Operate as a Monopoly and Charge

question 74

Multiple Choice

Three firms agree to operate as a monopoly and charge the monopoly price of $100 for their product and (jointly) produce the monopoly quantity of 20,000 units. If the competitive price for the product is $35, under the Clayton Act these three firms face treble damages of_______.

• A)$1,000,000
• B)$3,000,000
• C)$3,900,000
• D)$1,300,000

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Definitions:

Price

The fiscal amount needed for the acquisition of a product or service.

Delphiniums

A genus of flowering plants known for their tall spikes of colorful flowers, commonly found in gardens.

Perfect Substitutes

Goods or services that can be used in exactly the same way and to the same extent, where one can completely replace the other in consumption.

Income Effect

The alteration in income for a person or the economy and the resulting influence on the demand for a certain good or service.