Prices set too low can actually be against the public interest

Consider two oligopolistic industries selling the same product in different locations. In the first industry, firms always match price changes by any other firm in the industry

In the second industry, firms always ignore price changes by any other firm. Which of the following statements is true about these two industries, holding everything else constant? A) Market prices are likely to be the same in both markets because they are both oligopolistic markets. B) No conclusions can be drawn about the pricing behavior under these very different firm behaviors. C) Market prices are likely to be lower in the first industry where firms always match price changes by rival firms than in the second where firms ignore their rivals' price changes. D) Market prices are likely to be higher in the first industry in which firms always match price changes by rival firms than in the second where firms ignore their rivals' price changes.

Open market operations intended to offset movements in noncontrollable factors (such as float) that affect reserves and the monetary base are called

A) defensive open market operations. B) dynamic open market operations. C) offensive open market operations. D) reactionary open market operations.