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Problem

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question

What is one reason why the government discourages collusion between large firms in the same industry?

category

economics

options

  1. Joint profit maximization leads to a decrease in consumer surplus as the price falls below competitive levels.
  2. Collusive output levels tend to increase, driving the price down to competitive levels.
  3. Collusion between large firms leads to an increase in consumer surplus.
  4. Collusive output levels tend to increase, driving the price above competitive levels.
  5. Joint profit maximization costs society consumer surplus as the price rises above competitive levels.
  6. Collusive output levels tend to decrease, driving the price down to competitive levels.
  7. Collusion between large firms leads to an oversupply in the market.
  8. Consumer surplus falls as the price is driven downward.
  9. Joint profit maximization leads to a decrease in market competition.
  10. Collusion between large firms leads to a decrease in consumer demand.

src

ori_mmlu-high_school_microeconomics

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