A Situation in Which Oligopolists Interacting with One Another Each

question 35

Multiple Choice

A situation in which oligopolists interacting with one another each choose their best strategy given the strategies that all the other oligopolists have chosen is known as a

• A) Nash equilibrium.
• B) dominant strategy.
• C) cartel.
• D) collusion solution.

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Definitions:

Cost Curve

A graphical representation showing the cost of producing different levels of output.

Economies of Scale

The reduction in the cost per unit that companies experience as a result of their large scale of operations, usually seeing these expenses decrease as the scale grows.

Diseconomies of Scale

An economic concept where, beyond a certain point, an increase in the scale of production leads to a rise in average costs per unit due to inefficiencies.

Long Run

A term in economics referring to a period wherein all inputs can be adjusted, including those that are typically fixed in the short run.