The Manner in Which One Oligopolist Reacts to a Change

question 5

Multiple Choice

The manner in which one oligopolist reacts to a change in price, output, or quality made by another oligopolist in the industry is

• A) a cooperative game.
• B) the reaction function.
• C) a zero-sum game.
• D) the concentration ratio.

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Definitions:

Margin of Safety

The difference between actual sales and the break-even point, measuring the risk of not covering fixed costs.

Pre-tax Income

The amount of income earned by an individual or company before any taxes have been deducted.

Variable Costs

Costs that vary directly with the level of production or service activity, such as raw materials and labor hours.

Expected Total

The projected sum or outcome of a particular set of data or financial transactions over a specified period.