The More Firms an Oligopoly Has

question 383

Multiple Choice

The more firms an oligopoly has,

• A)the more likely it is to earn monopoly profits.
• B)the higher the price of the product.
• C)the farther the equilibrium quantity will be from the socially efficient quantity.
• D)the more likely the firms will charge a price close to the perfectly competitive price.

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Definitions:

Trade-off

A case where the gain of one property or aspect comes at the cost of losing another.

Budget Constraints

Refers to the limitations on the consumption choices of individuals or entities due to their available resources, such as income or wealth.

Indifference Curves

Graphical representations showing combinations of two goods that give the consumer equal satisfaction and utility.

Optimum

The most favorable condition or level of something, where benefits are maximized and negative effects are minimized.