Suppose That an Industry Consists of a Two-Firm Cartel: Firm

question 10

Multiple Choice

Suppose that an industry consists of a two-firm cartel: Firm A and Firm B. Each firm agrees to produce and sell only 100 units of output per week. This level of output maximizes total industry profit. Which of the following is true?

• A) Firm B could increase its profits by producing and selling only 90 units of output per week.
• B) Both firms could increase their profit by lowering their price and expanding output.
• C) Firm A could increase its profit by producing and selling a little more than 100 units of output.
• D) Firm B could increase Firm A's profits by producing and selling 10 percent more output.

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Definitions:

Testator

A person who has made a will, especially one that is legally valid.

Incomplete Disposition

The failure to fully deal with or dispose of an asset or a legal matter.

Trust Property

Refers to assets held in a trust, managed by a trustee on behalf of the beneficiaries of the trust according to the terms of the trust agreement.

Resulting Trust

A trust that is implied by law to effectuate the presumed intention of the parties involved, often arising when a property transfer does not fit the characteristics of an express trust.