Why Might Only a Few Firms Dominate an Oligopolistic Industry

question 23

Multiple Choice

Why might only a few firms dominate an oligopolistic industry?

• A)A natural or legal barrier to entry exists.
• B)Perfectly elastic demand makes small-scale operation economically inefficient.
• C)Decreasing returns to scale may make small-scale firms more advantageous.
• D)Inelastic market demand leads to the domination of the industry by a few firms.
• E)It is due to the outcome of the prisoners' dilemma.

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Definitions:

Midbrain

A portion of the central nervous system associated with vision, hearing, motor control, sleep/wake, arousal (alertness), and temperature regulation.

Occipital Area

The region at the back of the brain which is primarily responsible for visual processing.

Hypothalamus

A small region at the base of the brain crucial for hormone production and regulation, influencing body temperature, hunger, mood, and more.

Motivated Behavior

Actions that are initiated or directed by a desire or need, highlighting the drive toward achieving a specific goal or satisfying a physiological or psychological requirement.