In Which of the Following Industries Would We Expect Collusion

question 58

Multiple Choice

In which of the following industries would we expect collusion to be most effective?

• A) retail gasoline, where most gas is sold by a large number of small dealers
• B) crude oil production, where most oil is sold by a small number of large sellers
• C) housing construction, an industry dominated by local firms that produce unique products
• D) soybean production, where there are large numbers of farmers in many countries

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Definitions:

Factor Demand

The demand for input factors by businesses that are required to produce goods or services.

Outputs

The products or services generated by a business or an economic system.

Inputs

The resources, such as capital, labor, and materials, used in the production process to create goods or services.

Marginal Product

The increase in output that occurs when one more unit of a certain input is added, with all other inputs remaining the same.