From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S. and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
D B and C are correct.
A Due to their differences in quality and performance, dealer bicycles are not close substitutes. (A)
C Dealers are small sellers and have little control over bicycle prices.
B The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors. (B)
E A and B are correct.
E A and B are correct.
You might also like to view...
Section 301 actions are more frequently used as a tool of trade policy, especially since the formation of the World Trade Organization
Indicate whether the statement is true or false
If the world price is higher than the no-trade domestic price, then domestic producers gain, and domestic consumers lose as a result of free trade.
Answer the following statement true (T) or false (F)