Oligopolists Are More Sensitive to the Pricing and Output Policies

question 211

Multiple Choice

Oligopolists are more sensitive to the pricing and output policies of their rivals when

• A)all firms produce identical products
• B)their products are highly differentiated
• C)there is freedom of entry and exit
• D)there are barriers to entry
• E)there are many firms in the industry

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Definitions:

Bonds

Fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental, which includes terms for variable or fixed interest payments and the return of the original investment at maturity.

Shares

Units of ownership interest in a corporation or financial asset, providing an equal distribution in any profits, if any are declared, in the form of dividends.

Acquiring Company's Stock

Acquiring a company's stock refers to the purchase of a company's shares, which gives the purchaser ownership interest in the company.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, typically resulting in lower per-unit costs with increased production.