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The Clove Monopoly (Optional)
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The Clove Monopoly (Optional) - Practice Questions
1. In 1992, Indonesia established a trading board for cloves. The resulting board had both monopoly and monopsony power. As a result,
a. The board could purchase cloves at lower prices from farmers than in a market setting.
b. The board could sell cloves at a higher price than in a market setting.
c. Both a. and b.