Gratin and Tambec sell retail goods and are the two largest sellers in their oligopolistic market. Which action indicates that the two firms are colluding?
a. Gratin tells its customers that it will match Tambec’s advertised prices.
b. Gratin secretly coordinates its pricing strategy with Tambec.
c. Tambec offers its customers better credit terms than those offered by Gratin.
d. Tambec secretly tries to predict the pricing strategy of Gratin.
b. Gratin secretly coordinates its pricing strategy with Tambec.
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If national saving (S) is $100,000, net taxes (T) equal $100,000 and government expenditure (G) is $25,000, how much are households and businesses saving?
A) $25,000 B) $225,000 C) -$25,000 D) none of the above
If the intersection of the IS curve with the horizontal axis comes at a level of output below the natural level of output, lowering interest rate to zero will
A) bring economy back to natural output. B) not bring the economy back to natural output. C) will have inflationary effects on the economy. D) will cause saving rates to increase.
Externalities can occur as a result of either production or consumption activities
a. True b. False
If different people own the different stages of production of a commodity, a contract or market relationship helps to minimize transaction risks and creates economic value
Indicate whether the statement is true or false