Suppose That fiVe fiRms in an Oligopoly Formally Sign a Contract

question 2

Multiple Choice

Suppose that five firms in an oligopoly formally sign a contract to establish the price of the product in the market. In other words, they have _____.

• A) increased the elasticity of demand for the good
• B) increased the variety of the goods available to the consumer
• C) formed a cartel
• D) increased competition in the market

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Definitions:

Supplier's Products

The goods or services provided by a supplier to retailers or distributors for the purpose of resale or incorporation into another product.

Capabilities

The qualities, skills, or resources a person or organization has that enable them to perform or achieve certain actions or outcomes.

Buying Criteria

Buying criteria are the specifications and considerations that customers use to evaluate and decide on the purchase of products or services.

Warranty

A guarantee given to the purchaser by a manufacturer or dealer, promising to repair or replace the product within a certain period if necessary.