A Market with Three Firms in Competition with Each Other

question 35

Multiple Choice

A market with three firms in competition with each other has a equilibrium price of $5 and equilibrium quantity of 10,000. If the three firms form a cartel, the cartel, set price will be _________ than $5 and the set quantity will be________ than 10,000.

• A)greater; less
• B)less; greater
• C)greater; greater
• D)less; less

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Definitions:

Projection

A defense mechanism where an individual attributes their own unacceptable thoughts or feelings onto someone else.

Consensus Cue

A signal or piece of information indicating that a group is reaching or has reached general agreement on a particular issue.

Distinctiveness

The quality of being different or unique, distinguishing an individual, group, or object from others in a specific context or among comparable entities.

Stereotype

A prevalent, yet rigid and simplified conception of a certain category of people or items.