Following mergers that raised the market shares of two airlines to 79 and 82 percent, respectively, of traffic in their hub cities, prices of service rose and the quantities of service fell, even though in most other markets, prices fell and quantities increased. The result suggests thatÂ
A. these markets were contestable.
B. there was evidence of market power.
C. oligopoly firms bought out their competitors.
D. the market had no barriers to entry.
Answer: B
You might also like to view...
The Zonamo company produces waste disposal machines and sells them to militaries all over the world. The company started last year with $10 million of capital on hand and invested $15 million in new capital throughout the year
At the end of the year, the company's capital stock was $17 million. Hence, for the year, depreciation equaled ________ and net investment equaled ________. A) $25 million; $5 million B) $5 million; $5 million C) $8 million; $7 million D) $7 million; $8 million E) $8 million; $15 million
Legislators facing a close electoral contest will tend to favor
A) policies with benefits greater than costs for everyone. B) policies with benefits greater than costs for the majority. C) policies with benefits in the near future and deferred costs. D) policies representing the public interest.
A monopoly firm engaged in international trade will
A) equate marginal costs with marginal revenues in both domestic and foreign markets. B) equate average to local costs. C) equate marginal costs with foreign marginal revenues. D) equate marginal costs with the highest price the market will bear. E) equate marginal costs with the relative world prices.
A market in which there are neither external benefits nor external costs is inefficient.
Answer the following statement true (T) or false (F)