Which of the Following Is NOT a Cause for an Oligopoly

question 3

Multiple Choice

Which of the following is NOT a cause for an oligopoly to exist?

• A) economies of scale
• B) structural dependence
• C) barriers to entry
• D) horizontal mergers

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Definitions:

External Costs

Costs of economic activities that affect third parties outside the transaction, which are not reflected in market prices.

Tax

A compulsory financial charge or levy imposed by a government on individuals or entities to fund public expenditures.

Negative Externality

Occurs when a decision by an individual or firm results in unwanted negative effects on another party not involved in the decision.

MSC (Marginal Social Cost)

The total cost to society of producing an additional unit of a good or service, including both private costs and any externalities.