Mika's Manicures Leases a Space in the Local Mall for $4,500

question 147

Multiple Choice

Mika's Manicures leases a space in the local mall for $4,500 a month. For her business, this expense would be considered a(n) :

• A)implicit cost of $4,500.
• B)explicit cost of $4,500.
• C)explicit cost of $0.
• D)fixed cost of $4,500.

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Definitions:

Collude

When two or more firms secretly agree to work together, often to set prices or market shares, in a way that distorts competition.

Market Demand Curve

A graphical representation showing the quantity of a particular good or service that consumers in a market are willing and able to purchase at various prices.

Price Leadership

A situation where a leading company sets prices that other firms in the market follow.

Tacit Collusion

An unspoken, informal agreement among competitors to avoid competitive behaviors like price wars, leading to higher prices for consumers.