From Example 1

question 38

Multiple Choice

From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S. and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?

• A) Due to their differences in quality and performance, dealer bicycles are not close substitutes.
• B) The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors.
• C) Dealers are small sellers and have little control over bicycle prices.
• D) A and B are correct.
• E) B and C are correct.

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Definitions:

Land Reform

The redistribution of agricultural land from large landowners to those with little or no land, intended to improve productivity and reduce inequality.

Ku Klux Klan

A white supremacist hate group in the United States known for promoting racism, anti-Semitism, and xenophobia, with a history of violence towards ethnic and racial minorities.

Reconstruction Era

The period after the American Civil War, from 1865 to 1877, focused on rebuilding the United States and integrating freed slaves into society.

Anti-immigrant

Opposition to immigration, often characterized by policies or social attitudes that discourage the arrival or integration of foreigners.