When Oligopolistic Firms Interacting with One Another Each Choose Their

question 172

Multiple Choice

When oligopolistic firms interacting with one another each choose their best strategy given the strategies chosen by other firms in the market, we have

• A)a cartel.
• B)a group of oligopolists behaving as a monopoly.
• C)a Nash equilibrium.
• D)the perfectly competitive outcome.

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Definitions:

Variable Cost

A cost that changes in proportion to the level of output or activity.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Contribution Margin

The selling price per unit, minus the variable cost per unit, used to determine the profitability of products or services.

Fixed Costs

Business expenses that remain constant regardless of the level of goods or services produced.