Oligopsony With Price Leadership
If a dominant firm acts as a price leader in an oligopsonistic input market, which of the following outcomes is most similar to that of a monopsony?
A
Input prices are driven down below competitive levels due to collective bargaining power against suppliers.
B
Suppliers merge forming monopolies themselves hence nullifying any influence from oligopoly-based price leadership tactics used by buyers.
C
A price war among suppliers ensues, leading all firms towards perfect competition conditions over time.
D
Suppliers innovate aggressively leading to rapid technological advancement and reduced input costs across industries.
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