Theory of Demand
Quick practice
Question 1 of 5
Assertion (A): In a practical oligopolistic market, such as the steel or cement industry, firms often exhibit a "follow-the-leader" pricing behavior.
Reason (R): The demand curve for an individual firm in a pure oligopoly is perfectly elastic because products are identical and consumers have perfect information.
In the light of the above statements, choose the most appropriate answer:
(A) is correct but (R) is incorrect.
Both (A) and (R) are correct but (R) is NOT the correct explanation of (A).
(A) is incorrect but (R) is correct.
Both (A) and (R) are correct and (R) is the correct explanation of (A).
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