It Is Difficult to Predict the Behavior of Oligopolistic Firms

question 11

Multiple Choice

It is difficult to predict the behavior of oligopolistic firms because

• A) there are few real-world examples of oligopolies for economists to study.
• B) oligopolists make decisions independently of each other.
• C) firms in oligopolistic industries react to each other's behavior in many ways.
• D) economists have paid little attention to the topic in recent years and so have not yet applied to it the techniques of modern economic theory.

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Definitions:

External Locus

A psychological term referring to individuals who believe that external forces or events strongly influence their life outcomes.

Cognitive Dissonance

The psychological unease felt by someone who concurrently possesses two or more conflicting beliefs, ideas, or values.

Consistent

Showing steady conformity to character, profession, belief, or custom over time.

Values

Fundamental beliefs or standards of an individual or group that guide behavior and decision making.