Question

The price leadership model does not assume which of the following? a. The price elasticity for...

The price leadership model does not assume which of the following?

a. The price elasticity for the leader is greater than for the smaller firms. b. Rivals will know how to respond to price changes.
c. The smaller firms are allowed to maximize their profits. d. The dominant firm maximizes its profits.

Oligopolistic interdependence refers to which of the following?

a. The need to pay attention to their internal costs b. The need to pay attention to their inputs
c. The need to pay attention to the actions of the government d. The need to pay close attention to the actions of rival firms

A cartel is not a group of firms that ____________.

a. limit output b. act without collusion
c. jointly maximize profits d. act as one

__________ is not a problem for stability within cartels.

a. Enforcing output quotas b. Good customer relations
c. Control over entry d. Cheating
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Homework Answers

Answer #1

Q1. The price leadership model doesn't assume which of the following?

Answer:- a) The price elasticity for the leader is greater than for the smaller firms.

Because it is Inelastic or less elastic.

Q2. Oligopolistic interdependence refers to which of the following?

Answer:- d) The need to pay close attention to the actions of rival firms.

Q3. A cartel is not a group of firms that _______

Answer:- b) act without collusion.

Q4. _________ is not a problem for stability within cartels.

Answer:- b) Good customers relations.

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