It Would Be Impossible for Members of the Fast-Food Industry

question 37

Multiple Choice

It would be impossible for members of the fast-food industry to collude to fix prices because

• A) there are not enough fast-food firms in the market.
• B) there are too many fast-food firms in the market.
• C) fast food is not durable.
• D) demanders would not buy from firms that collude.
• E) the price of fast food is too low.

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Definitions:

Cost Related

Pertaining to or concerning the expenses incurred in the production of goods or the operation of a business.

Equity Investment

An investment in shares of stock, representing ownership in a company, with the expectation of generating income from dividends and capital gains.

Fair Value Method

An accounting technique that measures and reports assets and liabilities on the basis of estimates of their current market value rather than historical cost.

Bond Investments

Financial securities that represent a loan made by an investor to a borrower, typically corporate or governmental.