When More Firms Enter into a Market That Was Previously

question 22

Multiple Choice

When more firms enter into a market that was previously characterized as a duopoly,it will

• A) be easier for firms in the market to form a successful cartel.
• B) be more difficult for firms in the market to form a successful cartel.
• C) be just as difficult for firms in the market to form a successful cartel as it was before the new firms entered.
• D) be impossible for firms in the market to form a successful cartel,whereas before the new firms entered,it would have been possible.
• E) still be impossible for firms in the market to form a successful cartel.

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Definitions:

Predetermined Manufacturing Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated before the manufacturing process begins based on estimated costs.

Total Cost

The complete cost of producing goods or services, including fixed and variable costs, which is used to determine profitability and pricing.

Unit Cost

The expenses associated with manufacturing, warehousing, and distributing a single unit of a product or service.

Payroll Taxes

Charges applied to employers or their workers, typically measured as a fraction of the earnings paid by companies to their employees.