2) Where formal cartels are illegal, what techniques can firms use to attempt to prevent “price wars” from breaking out and to maintain a price level in the market, which approximates the level that a monopolist would charge?
These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.1) Since monopolistically competitive firms have market power, they will produce less and charge more than a firm would under perfect competition. This causes deadweight loss for society...
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