Consider Two Oligopolistic Industries Selling the Same Product in Different

question 140

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 behavior under these very different firm behaviors.

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Definitions:

Independent Self

A concept of self-identity that emphasizes individualism, autonomy, and self-reliance, often contrasting with a collectivist or interdependent view of self.

Interdependent Self

represents a self-concept that is fundamentally connected to and contingent on relationships with others.

Collective Self

A concept referring to the perception or awareness of belonging to a group, where the group's identity and interests are integrated into an individual's self-identity.

Relational Self

An aspect of an individual's self-concept derived from their relationships with others.