a. If all firms in an industry joined together and behaved as
a single seller, they could maximize their joint. We
refer to such a group as a.
b. To maximize joint profits, a cartel must reduce and
raise , compared to the perfectly competitive levels.
c. Cartels tend to be unstable because any individual firm
has an incentive to by selling than the agreed
upon output.
d. If a cartel is to succeed in the long run it must restrict
by new firms.
e. Taxi industries in most cities were effectively government
sanctioned before they were challenged by
innovative new firms like Uber and Lyft.
3. Fill in the blanks to make the following statements correct.
a. A ski-lift ticket on a Wednesday is cheaper than the same
ticket on a Saturday. This is probably an example of
b. A firm is more likely to be able to price discriminate if it
has some market ; if the firm is able to determine the
to pay of various consumers; and if it can prevent
.
c. The most common form of price discrimination is
between different of the market. A price-
discriminating firm will maximize profits by charging
higher prices in those segments with elastic demand.
d. If a monopoly is able to price discriminate among units, it
is profit maximizing for that firm to total output
