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:

Active Listening

A technique of careful listening and feedback, involving paying full attention to the speaker, understanding their message, responding, and remembering.

Interpretation

The act or process of explaining the meaning of something, often used in analyzing language, literature, and dreams.

Counterconditioning Techniques

Methods used in behavioral therapy to reduce unwanted behaviors by associating them with positive stimuli.

Mary Cover Jones

An early psychologist known for her work in desensitization and conditioning, often considered the "mother of behavior therapy."