Each Firm in a Cartel Has an Incentive to Chisel

question 22

Multiple Choice

Each firm in a cartel has an incentive to chisel because market price exceeds

• A)marginal cost.
• B)average cost.
• C)average variable cost.
• D)average fixed cost.

Understand the concepts of economies of scale, constant returns to scale, and diseconomies of scale.

Identify how changes in output affect long-run average total cost.

Calculate average fixed, variable, and total costs given specific data.

Analyze the effect of scale on production costs in both the short run and long run.

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Definitions:

Community Property

A legal concept used in some states that dictates that property acquired by either spouse during the marriage is owned equally by both spouses.

Easement

A right granted to use another person's property for a specific purpose, such as right of way.

Joint Tenancy

A form of property ownership in which two or more parties own a property together, with rights of survivorship.

Community Property

A type of shared asset ownership usually among married couples, in which properties obtained while married are equally held by each partner.