Consider Two Oligopolistic Industries Selling the Same Product in Different

question 141

Multiple Choice

Consider two oligopolistic industries selling the same product in different locations.In the first industry, firms always match price changes by any other firm in the industry.In the second industry, firms always ignore price changes by any other firm.Which of the following statements is true about these two industries, holding everything else constant?

• A)Market prices are likely to be higher in the first industry, in which firms always match price changes by rival firms, than in the second, where firms ignore their rivals' price changes.
• B)Market prices are likely to be lower in the first industry, where firms always match price changes by rival firms, than in the second, where firms ignore their rivals' price changes.
• C)Market prices are likely to be the same in both markets because they are both oligopolistic markets.
• D)No conclusions can be drawn about the pricing behaviour under these very different firm behaviours.

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Adulthood

A stage of life characterized by the attainment of legal age and the ability to manage personal and financial responsibilities independently.

Stem Cells

Undifferentiated biological cells that can differentiate into specialized cells and divide to produce more stem cells.

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Cells that have the potential to differentiate into more specific cell types, often involved in the development of tissues or organs.

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A cell that has a specific function and structure for its role in an organism, such as muscle cells, nerve cells, and blood cells.