Question

Question 45 (1 point) Why are collusive arrangements difficult to enforce in the business world? the mafia makes it more complicated firms have a strong incentive to cheat on the cartel O they aren't difficult to enforce at all in the real world OPEC is excellent at keeping its cartel together Question 46 (1 point) Which is true when two producers with significant market share, merge into a single firm? O the market supply increases along with the concentration ratio the market supply decreases along with the concentration ratio the market structure has changed from an oligopoly to a natural monopoly 21 the market supply decreases and the concentration ratio increases Page 8 of 9 Next Page Previous Page DEC 1 21 16 MacBook Air

Answer 1

Answer 45. The firms have a strong incentive to cheat on the cartel.

Reason- When firms collude they can set a price or limit tge quantity of good to be sold. Now if one of the firm wants to cheat, it can simply lower the prices, gaining complete market share which would be against the collusion.

Answer 46. The market supply increases along with the concentration ratio.

Reason- When two major firms merge into one, the average cost of production falls. The firms market supply rises due increased share in the market. Also the concentration ratio rises as the competition falls.