Why Is It Difficult for Economists to Predict the Price

question 247

Multiple Choice

Why is it difficult for economists to predict the price and output policy that will emerge in oligopolistic markets?

• A) Economists cannot determine if barriers to entry exist in a market.
• B) Economists cannot predict the reactions that firms will have to the actions and decisions of other firms.
• C) The government prevents economists from acquiring the information that would lead to good predictions.
• D) Firms have a set price and output policy, but the policy is concealed to discourage competition.

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Definitions:

Competence

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Kant's Categorical Imperative

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