Exhibit 30-1 ​

question 9

Multiple Choice

Exhibit 30-1
​

-Refer to Exhibit 30-l. If the exhibit represents a negative externality situation, the private cost of expanding output from Q₂ to Q₁ is the area of

• A)ABC.
• B)Q₂BCQ₁.
• C)Q₂BAQ₁.
• D)Q₂EAQ₁.

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Definitions:

Sherman Act

A United States antitrust law passed in 1890 that outlaws monopolistic business practices.

Conspiracy

Conspiracy is an agreement between two or more persons to commit an illegal act or to accomplish a legal end through illegal means.

Price-fixing Conspiracy

An illegal agreement between competing businesses to fix prices at a certain level, restricting competition and violating antitrust laws.

Parallel Pricing

A situation where competitors in the market set their prices at a similar level without explicit agreement, often as an anti-competitive practice.