As the Number of Firms in an Oligopoly Increases

question 475

Multiple Choice

As the number of firms in an oligopoly increases,

• A)each seller becomes more concerned about its impact on the market price.
• B)the output effect decreases.
• C)the total quantity of output produced by firms in the market gets closer to the socially efficient quantity.
• D)the oligopoly has more market power and firms earn a greater profit.

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Definitions:

Usury Laws

Regulations that set the maximum interest rate that can be charged on loans.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid to the lender for the use of their funds.

Usury Laws

Regulations governing the amount of interest that can be charged on a loan, intended to protect consumers from excessive rates.

Shortage

A situation in which the demand for a product or service exceeds its supply in a market.