Use the following statements to answer this question: I. If the extent of a market is broader, it is less likely that firms in the market can influence the market price.
II) In determining whether two different products belong to the same market, it is necessary to know whether the two products can be used as substitutes for each other.
A) I and II are both false.
B) I is false, and II is true.
C) I is true, and II is false.
D) I and II are both true.

Question

Quizplus · Accepted Answer

Statement I is true because a broader market means there are more competitors and therefore less market power for individual firms. Statement II is also true because in order for two products to be considered part of the same market, they must be able to be used as substitutes for each other.

Use the Following Statements to Answer This Question: I