Question

6. In the case of _______ there is no direct communication or coordination between competing firms....

6. In the case of _______ there is no direct communication or coordination between competing firms. However, in the case of a _______ there is a formal agreement to produce _______ to increase the selling price.

Group of answer choices

tacit collusion, cartel, more

tacit collusion, cartel, less

cartel, tacit collusion, more

cartel, tacit collusion, less

7. Which of the following is true when a firm maximizes profit? There is more than one correct answer to this question. You must mark all of the correct answers to receive full credit.

Group of answer choices

marginal revenue equals zero

marginal revenue equals marginal cost

marginal profit equals zero

marginal profit equals marginal cost

marginal revenue equals average total cost

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Homework Answers

Answer #1

Ans.6- B

Tacit Collusion - Where firms make informal agreement or collude without actually speaking to their rivals.

Cartel - A cartel is an agreement in order to regulate prices between a group of producers of a goods or service. They can reduce supply in order to increase the price of the product.

Ans.7- B and C

A firm maximizes profit by producing output where MR=MC.
Marginal profit = MR- MC

So, when marginal profit is 0 we again arrive at the same condition i.e. MR=MC.

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