Refer to the Diagram for a Non-Collusive Oligopolist

question 67

Multiple Choice

Refer to the diagram for a non-collusive oligopolist. Suppose that the firm is initially in equilibrium at point E, where the equilibrium price and quantity are P and Q. If the firm's rivals will ignore any price increase but match any price reduction, then the firm's demand curve will be (moving from left to right)

• A)D₁ ED₂.
• B)D₂ ED₁.
• C)D₁ ED₁.
• D)D₂ ED₂.

---

Definitions:

Myopic

Short-sightedness; a condition where close objects are seen clearly, but distant objects appear blurred. Also used metaphorically to describe a lack of foresight or long-term planning.

Eyeball

The spherical part of the eye that contains the visual apparatus and is responsible for vision.

Spherical

Having the shape or form of a sphere, often used to describe objects or celestial bodies.

Eyeballs

Organs of vision in humans and animals that detect light and convert it into electro-chemical impulses in neurons.