APFIVE Oligopsony With Price Leadership
If a dominant firm employs price leadership in an oligopolistic input market with few suppliers, what outcome might resemble that found in monopsony markets?
A
A price war among suppliers ensues, leading all firms towards perfect competition conditions over time.
B
Suppliers innovate aggressively leading to rapid technological advancement and reduced input costs across industries.
C
Input prices are driven down below competitive levels due to collective bargaining power against suppliers.
D
Suppliers merge forming monopolies themselves hence nullifying any influence from oligopoly-based price leadership tactics used by buyers.
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