Price collusion might occur in oligopolistic industries because multiple choice 1 costs are similar among firms. price competition results in diseconomies of scale. price competition can lower revenue for all firms. price competition results in economies of scale. b. Assess the economic desirability of collusive pricing.

An insurance company estimates the probability of an earthquake in the next year to be 0.0015. the average damage done to a house by an earthquake it estimates to be $90,000. if the company offers earthquake insurance for $150, what is company`s expected value of the policy? hint: think, is it profitable for the insurance company or not? will they gain (positive expected value) or lose (negative expected value)? if the expected value is negative, remember to show "-" sign. no "+" sign needed for the positive expected value