The European regulator in November 2008 fined car glass producers Asahi, Pilkington,
Saint- Gobain and Soliver more than 1.3 billion euros ($1.66 billion) for price fixing, the largest sum ever levied by the EU on a cartel. What are the economic justifications for making price fixing illegal?
A) Consumers suffer because of decreased consumer surplus and the outcome is inefficient because of deadweight loss.
B) The cartel increases quantity supplied in the market causing a surplus and therefore harming other producers.
C) The cartel increases quantity supplied in the market causing a shortage.
D) An oligopoly cartel can maximise profit and behave like a natural monopoly.
Correct Answer:
Verified
Q88: Firm A Q89: The prisoners' dilemma has an equilibrium that Q90: In an oligopoly Q91: If both firms in a duopoly cheat Q92: A contestable market necessarily occurs when Q94: In a contestable market with one firm Q95: Two firms, Alpha and Beta, produce identical Q96: A duopoly occurs when _. Q97: In the oligopoly price- fixing game, the Q98: Game theory is applicable to oligopoly behaviour
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A) there is no product
A) two
A) the one
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