When Managers in Oligopolistic Firms Make Decisions That Affect Output

question 262

Multiple Choice

When managers in oligopolistic firms make decisions that affect output or price, they must

• A) also be sure they erect barriers to entry to prevent new entrants from affecting their plans.
• B) anticipate the reactions of their rivals and plan accordingly.
• C) register with the Antitrust Division of the Department of Justice.
• D) inform the regulators of their industry about their plans.

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Definitions:

Indirect Labor

Labor costs that are not directly tied to the production of goods or the performance of services, such as the salary of a factory supervisor.

Overhead Applied

The allocation of estimated overhead costs to individual units of production based on a predetermined rate.

Direct Labor Costs

The total cost incurred by a company for the wages of employees who are directly involved in the operational production process.

Materials Requisition

A materials requisition is a document or electronic request used within a company to authorize the transfer of materials from inventory for production or other use.