The Number of Firms in an Oligopoly Must Be

question 103

Multiple Choice

The number of firms in an oligopoly must be

• A)Four.
• B)Large enough so that firms cannot coordinate.
• C)Small enough so that one firm's decisions have a significant impact on the decisions of the other firms in the industry.
• D)Small enough so that revenues are large enough to support advertising expenditures.

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Definitions:

Economic Profit

The difference in overall financial returns and total operational expenditures, including both specific and assumed costs.

Lower Production Costs

Lower production costs refer to a reduction in the expenses associated with creating a product or service, which can lead to increased profitability.

Economically Efficient

A situation in which resources are distributed in a manner that maximizes overall societal benefits.

Production Techniques

The methods and processes employed in the manufacturing of goods or provision of services, often aimed at improving efficiency and productivity.