As the Number of Sellers in an Oligopoly Increases

question 36

Multiple Choice

As the number of sellers in an oligopoly increases,

• A) output in the market tends to fall because each firm must cut back on production.
• B) the price in the market moves further from marginal cost.
• C) collusion is more likely to occur because a larger number of firms can place pressure on any firm that defects.
• D) the price in the market moves closer to marginal cost.

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Definitions:

Bacterium

A member of a large group of unicellular microorganisms lacking a nucleus and other organelles, with some species causing disease.

Bacterial Transformation

A process by which bacteria take up foreign DNA from their surroundings, leading to genetic change.

DNA

A molecule that carries the genetic instructions used in the growth, development, functioning, and reproduction of all known living organisms and many viruses.

Anticodon

A sequence of three nucleotides in transfer RNA that is complementary to, and combines with, the three-nucleotide codon.