Which of the following statements is TRUE? It Is easier to establish a cartel fo
ID: 1226862 • Letter: W
Question
Which of the following statements is TRUE? It Is easier to establish a cartel for a manufactured good than foe a natural resource. Cartels ate more successful when there are many substitutes for the cartel's good. The high prices charged by a cartel might lead to new firms entering the industry, reducing the cartel's market power. OPEC's high oil prices encourage countries like Mexico, Great Britain, and the Netherlands to cut back on oil production. Some researchers estimate that all saltwater fish will be extinct by 2048. in large part due to overfishing. But surveys also show that more households chicken and beef than fish; however, neither chickens nor beef are in danger of extinction Which of the following best explains these observations? The supply of fish has always been less than the supply of chicken and beef Fish tend to be resources, whereas chicken and beef are excludable Fish tend to be nontrivial resources, whereas chicken and beef are rival. The price of fish Is much higher than the price of chicken and beef. After you have been In a job for a while, you should portray your switching costs as: high because the firm will think that they do not need to pay you much, high because then they can ask you to manage the most unpleasant responsibilities low so they can begin to interview for your replacement.Explanation / Answer
38) A and C are true
A is true because natural resources tend to have too many suppliers and cannot form cartel that easily, A small mine can produce large quantities of natural resources if prices are higher, so cartel is not easy
C the higher prices charged by cartels usually make some firms to enter market and cut prices, this will lead to rapid loss of power for cartel.
Ex: In India tyre manufacturers formed cartel and suddenly one small tyre company started manufacturing which reduced cartels power.
39)
B) Open oceans were non-exculdable, Fishermen then just wanted to catch more fish but chicken and beef are excludables.
It is not possible to restrict someone to catch fish in ocean,
40) C
Once the firm began searching for my replacement the switching cost is much lower.
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