What is one reason why the government discourages collusion between large firms in the same industry?
A.
Collusive output levels tend to increase, driving the price above competitive levels.
B.
Consumer surplus falls as the price is driven downward.
C.
Collusive output levels tend to decrease, driving the price down to competitive levels.
D.
Joint profit maximization drives profits downward, forcing colluding firms to exit the industry.
E.
Joint profit maximization costs society consumer surplus as the price rises above competitive levels.
Exam No： AP Micro Practice Test 4 Year：2024 Question No：46
Answer:
E
Knowledge points:
4.1 Introduction to Imperfectly Competitive Markets
4.5 Oligopoly and Game Theory
6.4 The Effects of Government Intervention in Different Market Structures
Solution:
Download APP for more features
1. Tons of answers.
2. Smarter Al tools enhance your learning journey.
IOS
Download
Download
Android
Download
Download
Google Play
Download
Download