If We Assume That Price Leadership Prevails in a Particular

question 86

Multiple Choice

If we assume that price leadership prevails in a particular industry,what might prevent the leader from announcing a dramatic increase in the price of the product sold?

• A)The fear that the AC of the other firms within the industry would decrease.
• B)The fear that new firms would be tempted to enter the industry.
• C)The fear that one of the other firms would break ranks and increase their price even more.
• D)The fear that such action would provide proof that the firms are engaged in overt collusion.

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Definitions:

Other Income

Revenue from non-core business activities, including interest, dividends, or any other non-operational income sources.

Trading Investments

Trading investments refer to securities bought and held primarily for selling in the short term to profit from their price fluctuations.

Comprehensive Income

The total change in equity for a business enterprise during a period from transactions and other events from non-owner sources, including all non-owner changes in equity.