Assuming That Oligopolists Do Not Have the Opportunity to Collude

question 83

Multiple Choice

Assuming that oligopolists do not have the opportunity to collude, once they have reached the Nash equilibrium, it

• A)is always in their best interest to supply more to the market.
• B)is always in their best interest to supply less to the market.
• C)is always in their best interest to leave their quantities supplied unchanged.
• D)may be in their best interest to do any of the above, depending on market conditions.

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Definitions:

Cost Pool

A collection of indirect costs grouped together based on similar cost drivers for the purpose of allocation to products, services, or departments.

Activity-Based Costing

A costing methodology that assigns costs to products and services based on the activities and resources that go into producing them.

Overhead Cost Per Unit

The indirect manufacturing costs allocated to each unit of product produced.

Departmental Overhead Rate

A rate used to allocate overhead costs to specific departments, calculated based on the relationship between indirect costs and activity level.