Under What Conditions Would It Be Legal for Two Bakeries

question 194

Multiple Choice

Under what conditions would it be legal for two bakeries in Minneapolis to explicitly agree to raise their prices by 5 percent?

• A) if the price rise was not predatory
• B) if the price rise did not measurably increase producer surplus
• C) never
• D) if the price rise did not harm consumers in the long run by reducing competition
• E) if the price rise was necessary to keep one or both bakeries from closing.

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