In a cartel ?

A. Firms compete against each other
B. Price wars are common
C. Firms use price to win market share from competitors
D. Firms collude

In Game Theory ?

A. Firms are assumed to act independently
B. Firms are assumed to cooperate with each other
C. Firms collude as part of cartel
D. Firms consider the actions of others before deciding what to do

Firms in oligopoly are likely to ?

A. Invest heavily in branding
B. Act independently of other firms
C. Try to differentiate its products
D. Try to be a price maker

Many economics argue that resale price maintenance ?

A. has a legitimate purpose of stopping discount retailers from free riding on the services provided by full services retailers?
B. is price fixing and, therefore is prohibited by law
C. is price fixing and therefore, is prohibited by law and enhances the market power of the producer
D. enhances the market power of the producer

In the kinked Demand Curve theory it is assumed that ?

A. An increase in price by the firm is not followed by others
B. An increase in price by the firm is followed by others
C. A decrease in price by the firm is followed by others
D. Firms collude to fix the price

As the number of sellers in an oligopoly increases ?

A. output in the market tends to fall because each firm must cut back on production
B. the price in the market moves further from marginal cost
C. collusion is more likely to occur because a larger number of firms can place pressure on any firm that defects
D. The price in the market moves closer to marginal cost

Suppose that ABC publishing sells an economics textbook and accompanying study guide. Raheel is willing to pay Rs75 for the text and Rs15 for the study guide. Mariam is willing to spend Rs60 for the text and Rs25 for the study guide. Suppose both the book and study guide have a zero-marginal cost of study production. If ABC publishing charges separate price for both products its best strategy is to charge price that when combined, total ?

A. Rs 85
B. Rs 75
C. Rs 80
D. Rs 60

In cartels ?

A. Each individual firm profit maximizes
B. There may be an incentive to cheat
C. The industry as a whole is loss making
D. There is no need to police agreements

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