One reason why the smaller oligopolistic firms accept godfather pricing in unbalanced oligopoly is because they can
a. differentiate their products more fully in order to increase market power
b. engage in mergers if the godfather chooses the wrong price
c. together influence the price leader (godfather firm) to share industry profit more equally
d. enjoy a higher economic profit than they would otherwise
e. survive a price war without too many losses
D
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At its long-run equilibrium level of output, the demand curve facing an individual perfectly competitive firm is tangent to its
a. total economic profit curve. b. long-run average cost curve. c. marginal cost curve. d. marginal profit curve.
Double coincidence of wants is avoided if money is used as a:
A. store of value B. standard of deferred payment. C. measure of value. D. medium of exchange.
The proposition each extra percentage point of cyclical unemployment is associated with about a 2 percent widening of a negative output gap, measured in relation to potential output, is known as:
A. Okun's law. B. the Fisher effect. C. the expansionary gap. D. the recessionary gap.
Refer to the above figure. If flow (1) is the cost businesses pay to the resource market, then:
A. (4) is the flow of goods and services. B. (6) is the flow of money income. C. (7) is the flow of revenue. D. (2) is the flow of productive resources.