Oligopolists Will Maximize Total Profits for All of the Firms

question 68

Multiple Choice

Oligopolists will maximize total profits for all of the firms in the market at the rate of output where

• A) TR = TC for the total market.
• B) MR = MC for the marginal firm.
• C) AR = AC for each firm.
• D) MR = MC for the market.

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Definitions:

Price Elasticity

A measure of how sensitive the quantity demanded of a good is to a change in its price.

Consumer Purchases

This term refers to the buying of goods and services by consumers for their personal use.

Price Elasticity Coefficient

A measure used in economics to show how the quantity demanded of a good or service responds to a change in its price, calculated as the percentage change in quantity demanded divided by the percentage change in price.

Elastic

Describes a situation where the demand or supply of a good or service is sensitive to changes in price.