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.

---

Definitions:

Cost of Goods Sold

Direct costs attributable to the production of goods sold by a company, including materials and labor.

Inventory Period

The average time it takes for a company to turn its inventory into sales, reflecting the efficiency of its inventory management.

Cost of Goods Sold

The costs directly connected to the manufacture of goods a firm sells, comprising materials and labor.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for.