Prices of PlayStation3 Game Systems Are Similar at Almost Every

question 49

Multiple Choice

Prices of PlayStation3 game systems are similar at almost every large retailer and little price competition occurs among these retailers.An explanation for this is

• A)retailers are all price takers.
• B)retailers have lobbied state governments to allow them to collude legally to set the prices of certain products.
• C)pricing PlayStation3 game systems is a repeated game.Over a long period of time a cooperative equilibrium has been reached where retailers charge high prices for these systems.
• D)retailers are in a prisoner's dilemma which causes them to all charge the same price for PlayStation 3 game systems.

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Definitions:

Parent Ltd Indirect Interest

An ownership interest held by a parent company in a subsidiary through another subsidiary rather than directly.

Multiple Consolidation

The process of integrating financial statements from multiple subsidiaries into one aggregated set of financial statements for the parent company.

Ownership Interests

The rights and shares held by an entity or individual in another company, evidencing an ownership stake.

Direct and Indirect Ownership Interests

Holdings in a company that can be straightforward (direct) or through another entity (indirect).