Economics 9708 · AS & A Level · 7.6

7.6 — practice question

Four bus companies together account for over two-thirds of the market in one country. Opponents say that, on some routes, these firms set prices jointly to increase revenue, while on other routes they cut prices to prevent smaller rivals from entering the market. Which anti-competitive practices are the companies said to be using?

  • Acollusion and limit pricing
  • Bcollusion and price leadership
  • Climit pricing and price discrimination
  • Dprice leadership and x-inefficiency

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