Question

If the marginal cost for oligopolies or cartels suddenly fell due to a new technology, then these firms would also be forced to cut their prices.A. This is a true statement.B. This is a false statement.C. This is a true statement and the ATC would also fall.D. None of the above.

Answer 1

Answer: The correct answer is "B. This is a false statement.".

Explanation: If they are companies that compete with each other, depending on the behavior of each one, it will be determined whether or not they are forced to lower prices. But if it is a cartel which colludes for the benefit of all, surely companies would choose to keep prices at the same level since, having a lower cost, would imply a greater benefit.