A Automobile Marketing Firm Conducts a Study to See What

question 3

Multiple Choice

A automobile marketing firm conducts a study to see what types of cars people owned before buying an American car.The results are shown below. $$\begin{array} { | c | c | } \hline \text { Previous Ownership } & \text { Frequency } \\\hline \text { American } & 760 \\\hline \text { Japanese } & 375 \\\hline \text { Korean } & 72 \\\hline \text { German } & 37 \\\hline \text { Other } & 24 \\\hline \text { Total } & \mathbf { 1 2 6 8 } \\\hline\end{array}$$ The relative frequency of those who owned Japanese cars previously who now bought
American cars is

• A)59.9 %
• B)29.6%
• C)5.7%
• D)14.9%
• E)2.9%

---

Definitions:

Tacit Collusion

An unspoken, unofficial agreement between competitors to avoid certain actions or behaviors considered competitive, without explicit communication.

Nonprice Competition

Competition in areas other than price to increase sales, such as new product features and advertising; especially engaged in by firms that have a tacit understanding not to compete on price.

Nash Equilibrium

A concept within game theory where no player can benefit by changing strategies while the other players keep theirs unchanged.

Price Leadership

A pattern of behavior in which one firm sets its price and other firms in the industry follow.