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The Temptation for Firms to Collude in Setting Prices

Question 18

Multiple Choice

The temptation for firms to collude in setting prices


A) is especially strong for perfect competitors because they have the most to gain from a restriction of output.
B) does not exist for monopolistic competitors because their products are identical.
C) is especially strong for undifferentiated oligopolists because the absence of product differentiation shuts off an important avenue of non-price competition.
D) is especially strong for vertically integrated oligopolists because they are producing beyond the point at which marginal revenue equals marginal cost.

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