Which of the following do Smith and his collaborators argue is generally true of posted offer markets?
A) Price signalling and tacit collusion is easier when there are fewer, as opposed to more, sellers buyers in the market.
B) Demand withholding of buyers is greater when there are more as opposed to fewer buyers in the market.
C) Prices will converge smoothly to the equilibrium price as long as the magnitudes of the consumer and producer surplus are approximately equal.
D) Prices will tend to remain below the predicted equilibrium price.

Question

Quizplus · Accepted Answer

Smith and his collaborators argue that price signalling and tacit collusion is easier when there are fewer sellers or buyers in the market, as it simplifies the coordination among participants to influence prices.

Which of the Following Do Smith and His Collaborators Argue