In the presence of ______, the market mechanism can break down. extensive form g

Question

In the presence of ______, the market mechanism can break down.

extensive form games

normal form games

common knowledge

asymmetric information

An example of vertical foreclosure is when a firm:

temporarily prices below its marginal cost to close competitors out of the market. merges with a rival firm with the intention of eliminating the rival firm's product from the market. that controls an essential upstream input refuses to sell to other downstream firms that need the input. merges with a rival firm with the intention of eliminating the rival firm's product from the market and that controls an essential upstream input refuses to sell to other downstream firms that need the input.

Explanation / Answer

(1) In presence of asymmetric information, market mechanism can break down.

(2) Example of vertical enclosure: A firm controling an upstream input refuses to sell to downstream firms.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.