Question

The automobile industry in a developing country has very few sellers. If one automobile company raises the prices of its trucks by a certain amount, other automobile companies in the industry follow by raising prices by a similar amount. This situation is an example of:

Group of answer choices

a monopoly.

monopolistic competition.

pure competition.

an oligopoly.

a monopsony

2

Which of the following organizations mission is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information?

Group of answer choices

Securities Industry Association

American Institute of Certified Public Accountants

Public Company Accounting Oversight Board

Governmental Accounting Standards Board

Financial Accounting Standards Board

Answer 1

Solution. The answer to the first above given question is option fourth- an oligopoly

Explanation: Presence of the features of few sellers and, inter-dependence of pricing strategies influenced by other sellers follows an oligopoly market. Option first holds incorrect as in case of monopoly there exists single seller. Option second holds incorrect as in monopolistic competition there exists large number of buyers-sellers and follows independent pricing strategies. Option third holds invalid as in pure competition there exists large number of independent sellers and buyers and, non-influence of other firm's/seller's pricing decisions happen. Option last holds false as in monopsony there exists resource ownership along with single buyer.

2.The answer to the second above given question is last mentioned option- The Financial Accounting Standards Board(FASB)

Explanation: The FASB, a private and not-for-profit operating organization works with the mission, to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information. Other options hold false for the given question.