Figure: Demand 3 If the Two-Firm Oligopoly Facing the Market

question 131

Multiple Choice

Figure: Demand 3 If the two-firm oligopoly facing the market in this diagram is currently producing at the competitive output level and one of the firms reduces output by 4 units, the firm's profits would increase from _________________.

• A) $64 to $96
• B) $0 to $24
• C) $0 to $48
• D) $32 to $48

---

Definitions:

Journal

A detailed record where all financial transactions of a business are initially recorded before being transferred to accounts in the general ledger.

Ledger

A comprehensive collection of all the accounts of a business, where transactions are recorded in a structured and detailed manner.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, usually resulting in a net profit or loss.

Retained Earnings

The portion of net earnings not distributed to shareholders as dividends but retained by the company to be reinvested in its core business or to pay debt.