The Temptation for Firms to Collude in Setting Prices

question 77

Multiple Choice

The temptation for firms to collude in setting prices

• A)is especially strong for perfect competitors because they have the most to gain from a restriction of output.
• B)does not exist for monopolistic competitors because their products are identical.
• C)is especially strong for undifferentiated oligopolists because the absence of product differentiation shuts off an important avenue of non-price competition.
• D)is especially strong for vertically integrated oligopolists because they are producing beyond the point at which marginal revenue equals marginal cost.

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Definitions:

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