According to the ________ cheating model,assuming little or no product differentiation among a small number of firms,if one firm decides to cheat on a collusive agreement by reducing its prices,others will as well and,in the long run,firms in this industry will earn no economic profits.
A)Cournot
B)Edgeworth
C)Stackelberg
D)Bertrand

Question

Quizplus · Accepted Answer

The given description matches with the Bertrand model of oligopoly, where firms compete on price instead of quantity. If one firm reduces its prices to increase market share, other firms will follow to maintain their market share, eventually leading to zero economic profits in the long run.

According to the ________ Cheating Model,assuming Little or No Product