Question

For questions (10 )   t through (25) you write correct word for the blank space(YES STARTS AT 14, ALREADY HAVE 1-13)

Long run market demand must be (14)______for a Cartel to survive and do well.

Long run market supply must be (15)________for a Cartel to survive and do well.

According to Hotellings Paradox, an industry with a small number of sellers with large market shares will often end up offering products that are highly (16)_______

and are aimed at the (17)_______of the market.

Answer 1

Long run market demand must be  Increased ( exists various forms of collusion which reduce competition and lead to higher prices for consumers) for a cartel to survive and do well

Long run market supply must be Decreased ( tactics used by cartels include reduction of supply, price-fixing, collusive bidding, and market carving) for a cartel to survive and do well

According to Hotellings Paradox, an industry with a small nmber of sellers with large market shares will often end up offering products that are highly Difference    and are aimed at the control of the market.

1) Increased demand : Oligopoly market, exists various forms of collusion which reduce competition and lead to higher prices for consumers.

2) Decreased supply : Oligopolies differ from price takers in that they do not have a supply curve.Tactics used by cartels include reduction of supply, price-fixing, collusive bidding, and market carving) for a cartel to survive and do well.

3) Hotelling's Paradox principles stating that , firm seek to maintain similarities between product at the same time they maintain differences. Similarities enable sustitutability. That is one firm can attract the buyers way from other firms. differences enable uniqueness and market control.That means , a firm has a small monopoly for its product that allows it to charge a higher price than achieved with perfect competition. This is also termed the principle of minimum differences.

Thank you............