When an Oligopolist Individually Chooses Its Level of Production to Maximise

question 43

Multiple Choice

When an oligopolist individually chooses its level of production to maximise its profits, it charges

• A) more than the price charged by either monopoly or a competitive market.
• B) less than the price charged by either monopoly or a competitive market.
• C) more than the price charged by a monopoly and less than the price charged by a competitive market.
• D) less than the price charged by a monopoly and more than the price charged by a competitive market.

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Definitions:

Market-capitalization Rate

A valuation metric that assesses the total value of a company's outstanding shares by multiplying the stock price by the total number of shares.

Plowback Ratio

A financial metric indicating the proportion of earnings retained by a company after dividends are paid, used for reinvestment into business operations.

Expected ROE

The projected return on equity for a future period, based on estimates of future earnings and shareholders' equity.

Risk-free Rate

An anticipated earning on an investment that is free from the danger of monetary loss, commonly illustrated by the return rate on state-issued securities.