Indicate whether you agree with the following statements in italics, and explain your answer:

(a) Markets A and B are identical in all respects (demand, costs, number of firms, etc.). If the same firms compete in Market A as in Market B, we should expect collusion to be more sustainable than if there are different firms in Market A than in Market B. (b) Consider a standard Cournot model with N firms. This model predicts that increases in the HHI cause market power in the market to increase

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Responses to statements a Disagree While its true that identical markets and firms create a more con... View the full answer