Which of the Following Increases the Likelihood That a Group

question 229

Multiple Choice

Which of the following increases the likelihood that a group of sellers can increase profits as the result of collusion?

• A) the presence of a large number of firms in the industry
• B) intense quality competition among firms
• C) low barriers to entry into the industry
• D) a stable demand for the product

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Definitions:

Transaction Costs

Expenses incurred during the buying or selling process, not limited to the price of the good, like fees, taxes, or other costs associated with the transaction.

Middlemen

Intermediaries or agents who facilitate transactions between producers and consumers by buying goods from producers and selling them to consumers, often adding value through services like transportation or storage.

Transaction Costs

Expenses incurred during the process of buying or selling goods and services, which may include fees, taxes, or other costs.

Comparative Advantage

The theory suggesting that countries or entities benefit and gain efficiency from specializing in the production of goods or services for which they have a lower opportunity cost.