Question 1(Multiple Choice Worth 2 points)

(04.05 MC)

Compared to an oligopoly market without cooperation, one in which the individual firms form a cartel will produce ________ and charge ________.

less; less

less; more

more; less

more; more

indeterminate

Question 2(Multiple Choice Worth 2 points)

(04.02 MC)

The allocatively efficient quantity of product Z for the whole market is 2 million units. At that quantity, the demand for Z is at $5 and the average total cost for its single supplier is $7. The average total cost does not fall to $5 until 3.5 million units. Based on this data, the market for product Z is

operating with decreasing returns to scale

a natural monopoly

a legal monopoly

monopolistically competitive

productively efficient

Question 3(Multiple Choice Worth 2 points)

(04.04 MC)

Use the graph to answer the question that follows.

\fMartha Discount No Discount Megan Discount $50, $75 $75, $60 No Discount $35, $90 $70, $85