Suppose Proctor and Gamble Introduces a New Brand of Laundry

question 88

Multiple Choice

Suppose Proctor and Gamble introduces a new brand of laundry detergent. Brand proliferation is an example of

• A) explicit collusion.
• B) a Nash equilibrium.
• C) tacit collusion.
• D) a cooperative outcome.
• E) a firm- created barrier to entry.

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Definitions:

Differentiated

In a market, it refers to products that are distinguished from each other through variations in quality, features, branding, or customer service.

Oligopoly

A market structure in which a few firms sell either a standardized or differentiated product, into which entry is difficult, in which the firm has limited control over product price because of mutual interdependence (except when there is collusion among firms), and in which there is typically nonprice competition.

Homogeneous Product

A product that cannot be distinguished from competing products from different suppliers.

Differentiated Product

A product that is made distinct from similar products offered by competitors through unique features, quality, branding, or other attributes.