Assume That Two Firms (Firm a and Firm B) Operate

question 4

Multiple Choice

Assume that two firms (Firm A and Firm B) operate in the U.S. steel industry. The owner of Firm A writes the following letter to the owner of Firm B: Dear Owner of Firm B,
I have concluded that if we both restrict output such that we each produce only 3 million tons of steel per year, we can both charge a price that will allow us to effectively monopolize the steel market and to maximize our joint profits. If you would like to enter into this agreement with me, please draft a contract that specifies this agreement, and I will be more than willing to meet with you and sign it.
Sincerely,
Owner of Firm A
If this letter were sent in the year 1850, the:

• A) owner of Firm A would be guilty of violating antitrust laws.
• B) owner of Firm B would be guilty of violating antitrust laws.
• C) owners of both Firm A and Firm B would be guilty of violating antitrust laws.
• D) owner of Firm B would be guilty of violating antitrust laws only if he drafted and signed the agreement.
• E) owners of both Firm A and Firm B would not be guilty of anything because there were no antitrust laws in existence in 1850.

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Definitions:

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The degree to which two or more objects, ideas, or concepts are alike or share common features, which can influence cognitive processes like categorization and memory recall.

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A business establishment where meals or refreshments may be purchased.

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Theories suggesting that concepts are represented in the brain in a structured network of relationships, with more general concepts at the top and specific instances beneath.